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Changing the Narrative: Is Business Action on Climate Change Believable?

Changing the Narrative: Is Business Action on Climate Change Believable?

climate change narrative

‘Image courtesy of Michael on Flickr’

Blizzards in America. Heat waves ‘beyond the limit of human survival’ in the Middle East. Droughts across Australia, Africa, India. Floods bursting through city after city across the UK.

Such stories are part of the 20-year-long narrative surrounding global warming, backed up by scientific studies and the accelerating signs that our Earth’s temperature is probably going to kill us.

Attention-grabbing it may be, but reading headlines like these you’d be forgiven for thinking climate change is a Doomsday tale. After all, you come away knowing we’re basically just “rearranging deckchairs on the Titanic”. That humanity is on an inevitable, irreversible path towards destruction. The end.

It’s not a pleasant narrative. Not an inspiring narrative. Perhaps one with an element of smugness for the scientists who, in twenty years time and the planet is burning, can say, “We told you so.” But essentially a narrative of despair complete with finger-pointing over who is responsible: the fossil fuel industry, greedy corporates, thoughtless Westerners, over-ambitious BRICS. Even before the Paris Climate Summit last December, changing this narrative was a concern.

COP21 was a hugely positive turning point, committing 195 nations to decarbonisation and action on climate change. The best (and potentially last) chance to save the planet as we know it, the summit stood out because more than just the same figureheads attended. The private sector had a real, tangible presence too, seeming equally invested in creating a zero-carbon future.

Of course, putting words into action isn’t something for which the corporate sector is known. At least not when it comes to addressing climate change. As pointed out by Georg Kell, founder of the UN Global Compact and Vice-Chair of Arabesque Partners, the private sector has “often played a sophisticated game to demonstrate green credentials with marketing campaigns, whilst at the same time using its influence to stop or undermine climate policy action.”

This is why business is never the good guy in climate stories, news headlines, literature. Certainly not in our films or television shows. Highlighting failures, missed targets, lost jobs and huge expenses, the narrative around business and climate change has long been negative.

And on reflection, it doesn’t take much scrutiny to reveal the only thing holding the COP21 together is peer pressure.

At a Guardian Sustainable Business’ debate on the role of the business sector in addressing global warming, the promises made at COP21 were the nominal concern of the panel.

Pledges were made, brands swore themselves to the cause, sweeping promises ensured a positive spin to the Paris summit. But will any of them be kept? Will world leaders keep climate change on the agenda once cameras have stopped rolling and there are no more pretty speeches to be made?

Sitting in the audience, however, what was most evident was that the real problem wasn’t whether or not promises will be kept, nor even what’s worse – the companies that fail to keep their pledges or the ones not making them. The question most urgently on the agenda but noticeably unanswered was how we can tackle the narrative underpinning the two-decade long collective action failure.

Steve Howard, IKEA’s Chief Sustainability Officer, first raised narrative as a central issue for climate action. According to him, we ‘need to be strong on carbon pricing. We want enforced obligations. We want accountability. To drive actions. To drive solutions.”

After all, the question shouldn’t be is business action believable? We need to be answering on how to ensure action on climate change happens. We need to focus on solutions and those creating them.

What became apparent during the debate was that the lack of homogeny within the corporate sector represented a significant hurdle. The panel itself conveyed this.

Howard represented the most optimistic viewpoint. Emphasising the success of IKEA and the positivity surrounding COP21, he talked about Green Growth and how it can improve material well-being by creating a world of abundance. On the other hand, Kevin Anderson (Tyndall Centre for Climate Research) employed shock and awe rhetoric to present a ‘hard change’ narrative that concluded by accentuating how unlikely it was for the Marshall Islands to still exist in twenty years as temperatures would almost certainly rise by at least 4 degrees, not the 2 degrees promised in Paris.

Green MP Caroline Lucas raised the spectre of conspiracy, pointing out that the business lobbyists negotiating in parliament are far from supportive with many oil industry representatives having a hand in the legislation being drawn up to create the regulations deemed necessary if promises made at COP21 are to succeed. This, she pointed out, is problematic for the main reason that Big Oil is possibly the biggest enemy of climate action.

On the other hand, the two representatives of the financial sector – Nordea’s Sasja Breslik and Alliance Trust’s Katherine Garrett-Cox – seemed more concerned with the remaining faction of climate deniers who still lurk in boardrooms. This is understandable. According to a survey of 1,400 CEOs from around the world compiled by PricewaterhouseCoopers (PwC) and published at Davos, only 50% of CEOS perceive climate change and environmental damage as a threat to business growth. Instead “over-regulation was listed as the biggest threat (by 79% of CEOs), followed by geopolitical uncertainty (74%) and other key threats including cyber attacks (61%).”

Garrett-Cox explained, “If you ask what’s at the top of your risk register in a boardroom it’s not going to be climate change. But it probably should be. We’ve made progress … but too many CFOs think it’s still a novel conversation.”

Somewhat supporting the conspiracy theory upheld by Lucas, Garrett-Cox and Breslik also alluded back to the concerns of Georg Kell and the idea that climate action in the business sector is systemic lip service. It looks good to look green, but actually going green is still perceived as undesirable. Why? Because ‘mitigating climate change undermines the ability of the world’s people to achieve and sustain prosperity’.

However, whilst there remain entities determined to maintain the status quo, and the panel couldn’t come to a consensus on accountability for ensuring targets nor responsibility for presenting solutions, the one thing agreed on was things need to change. There’s no more space for doom and gloom. There’s no more time for emotional dialogue. It’s imperative we move to something more practical.

So to pull everything together and ignore the general confusion of the panel’s dialogue, several factors were seen as crucial to recreating the narrative so it says neither ‘everything is roses’ or ‘everything is futile’.

Firstly, there needs to be a mental change within the economic system. We need to update the way people are taught. The IPCC released their first emissions report in 1990, but education has barely changed and certainly not the basics on the challenges of global warming or how to face them. Instead, we need to teach the links between sustainability and profitability that Garrett-Cox pointed out. The market opportunities highlighted by Howard, not to mention the invaluable benefits a zero-carbon economy could produce through innovative, cost-effective energy solutions and renewable technologies.

Secondly, sustainability has to become a lifestyle choice. Rather than just being that scary thing we read about, that thing that requires sacrifice, that thing that hangs like an albatross around our necks, it needs to be shown as an opportunity for everyone. At the debate, it was pointed out that there are no real leaders in sustainability yet. But this, in itself, is a powerful position. As Armstrong described, it’s an opportunity. The lack of leadership means ‘we are all catalysts for change.’ We can all be leaders for the future.

Thirdly, creating jobs, boosting economic growth, improving lives, this is just part of the business case for a decarbonised society extending into our every day lives and this needs to be demonstrated through politics and the media in particular. It will also have to include rebuilding the West’s culture of shame and praise. Whilst incentive systems exist for a reason, ‘name and shame’ horror stories deter individuals and companies from even trying. We’re a naturally risk-averse species, after all. It’s why the Doomsday narrative doesn’t work.

And lastly, we have to ignore the lure of silver bullets. Regulation is not a silver bullet. Geoscience is not a silver bullet. At the end of the day, the only thing that is going to work is collective action.

Across the world, these alterations to the way we live and work are already beginning to be seen. COP21 highlighted them. The UN Global Compact, the rise of B Corporations, The B Team, Generation S and others all show movement within the corporate sector. Initiatives like the Forward Institute and Singularity U are emerging with the single focus of educating and empowering a future generation of leaders. The increased coverage of these initiatives in the media is also key. There are more dedicated climate change awareness sections in the established media as well as many new outlets such as Triple Pundit, Blue and Green Tomorrow, The New Economy, Collectively, and GOOD. All of this indicates a wider interest from the public and business leadership.

The narrative is changing. But now it’s time to completely cast out the doom and gloom and convey a realistic but aspirational alternative. Hard work it might be, but COP21 is not too little, too late. It’s just in time.

It has to be.

Fintech Week, Fintech Year: What to Expect in 2016

Every year more and more events focused on the fintech industry are appearing.

In 2015 alone there have been umpteen showcase occasions focused around finance, innovation and the technological challenge to the banking industry.

From Finnovate Europe in early February and Finnovate Spring in May, to the whirligig of Fintech Week in September and the upcoming Fintechtonic Awards in December, the landscape has become busier than ever.

It’s exciting.

It’s loud.

And there’s no sign yet that fintech’s rise is slowing down.

Fintech week, The PHA Group

‘Image courtesy of ING Group on Flickr’

In fact, the sector looks to be increasing across the world. Whilst London may have reached record highs for fintech investment, securing around 75% of the $2.2bn raised by UK firms since January. According to Accenture’s new report investments in financial technology in Asia Pacific are set to quadruple in 2015. This estimate comes from the fact fintech investment has hit $3.5bn, up from $880m throughout 2014. The report also revealed that 40% of these investments were in payment innovations, and 25% in lending.

The monumental surge of interest, development and use of fintech is evident. Consider Money 20/20, the annual financial services conference held in Las Vegas in October: numbers of attendees have soared from 2300 to 10,000 in just four years, from 85 showcasing companies to 506 across a range of industries from mobile to fintech.

So with no signs of stopping and all evidence pointing to 2016 as yet another year of exponential innovation and accomplishment, what can we expect as we move through the winter and into the new year?

Expect more new entrants

The industry will be all too aware of the increase in new entrants. Primed for technological innovation, traditional financial services face a continued rise of new businesses and products with their own agendas and ability to disrupt. Generating further competition, it’s likely banking services will feel the impact more keenly in the next twelve months. This is particularly true given the focus on the ‘Uberisation of Payments’ – startups aiming to revolutionise financial services to become efficient, effective, and inclusive.

Blurring disruption and innovation

In the 7th Annual Innovation in Retail Banking Report from Efma and Infosys Finacle, banks considered new disruptors the second highest threat (41%) after big tech companies like Apple and Google (45%). However, as banks accept they can’t stop the startups, more are likely to follow the trend set by banks like Barclays who finance them. Responding to the perceived threat by increasing investment and harnessing their innovations for themselves, this could help to improve the overall customer experience at banks.

Moreover, the regulatory landscape that has enabled so many fintech startups in the UK to thrive is becoming tougher. New developments now need to integrate more successfully, to have flexible and agile IT systems capable of responding to demands from entities like the FCA. Smaller entrants may therefore need extra support due to limited resources if they’re to build robust systems. The relationship might thereforesee a shift from challenger to partner.

Bitcoin vs. Blockchain

Cryptocurrencies are beginning to shake off their dubious reputations. Part of this is because of the underlying blockchain technology. Fact is, Bitcoin might have started the conversation, but now it’s being sidelined as household names have hopped on board the blockchain bandwagon in order to better their businesses through its technology. These include UBS, Citi Group and NASDAQ, all of whom seem to agree that blockchain will fundamentally alter the infrastructure supporting the finance landscape. There’s even the first Blockchain-inspired bank in the pipeline – Secco Bank, founded by Chris Gledhill.

Millennials & harnessing fintech for good

With COP21 only weeks away, businesses that are not ready for a world where they can balance principles and profit are likely to be left in the dust. Part of the reason for this is the rise of the millennials, those 18 to 34 year olds, in particular, the older HENRYs (High Earners Not Rich Yet) that comprise the top consumers of fintech. However, beyond their dissatisfaction with traditional banks and their love of frictionless payments, they’re also much more socially conscious when it comes to business. As Bill Roth wrote, ‘their combined experiences have made them fiscally conservative, socially tolerant, environmentally aware and urgently engaged’.

This is not to say older generations don’t want to manage their assets and bank accounts from their armchairs, but millennials are the thread stitching together the desire for change with the ability to use technology. They view the sharing economy as an efficient utilisation of their money. They seek transparency, appreciate brands engaged with causes, and are more invested in harnessing business for good. We can already see it in the popularity of blockchain and fintech’s ‘Robin Hood’ narrative (see Transferwise and Lend Invest). They also seek financial inclusion, revealing yet another reason for the popularity of mobile payments and uberisation.

The problem of data and cyber-security

The digitisation of services has obviously created its own set of problems. Just look at all the different hacks over the past twelve months – from Sony to TalkTalk, the risk of data theft has become of utmost priority to consumers as well as their financial providers. Threats from malware and hackers demonstrate the need for vast cyber-security investment in the finance space, and nimble fintech companies could be more adept at this than traditional, cumbersome institutions.

Fintech becoming mainstream

As fintech influencer Oliver Bussman argued, technology is changing the dynamics in the financial services industry. This may seem obvious, but as fintech continues its climb, more people will become aware of its potential and more customers will start using it. Fintech is moving beyond revealing and disputing antiquated practices, providing opportunities for competition, and overhauling the experience for everyday consumers. It’s generating positive change. It could even be argued that technology is making finance trendy as the likes of Apple Pay bring fintech into mainstream consciousness.

And, ultimately, it is this shift of financial awareness, innovation and technology into today’s zeitgeist that makes fintech 2015 and 2016 potentially so exciting.

COP21 and the Increasing Importance of CSR

Cop21, UK Conference on Climate Change'

‘Image courtesy of Ron Mader on Flickr’

In Paris next month, world leaders will converge at the United Nations summit on climate change, ‘COP21’.

With a sweeping new deal to reduce global carbon emissions expected to be agreed, some of the world’s largest fossil fuel companies – and their investors – will soon be on the wrong side of a powerful historical shift.

As Christiana Figueres, the UN’s top climate official recently explained, 155 countries have already put forward detailed plans covering nearly 90 percent of global CO2 emissions. “It is unstoppable. No amount of lobbying at this point is going to change the direction,” she told a Carbon Tracker forum in London.

But whilst high carbon companies will feel the most immediate impact of COP21, businesses of all shapes and sizes, irrespective of industry or country, should pay close attention to the Paris summit. For corporate social responsibility – and the idea of the purpose of a company in society – has gone fully mainstream.

Once seen as peripheral to companies’ main business activities, CSR is now not only seen as standard practice but indeed been shown to actively improve the bottom line when fully integrated into the business.

With corporations everywhere more engaged with CSR activities, it has never been more important to understand how to effectively communicate those strategies and achievements to stakeholders. Given the general public’s current distrust of some of our major companies, C-suite executives might understandably be concerned that these CSR communications are wrongly perceived as ‘greenwashing’. That is, falsely over-promoting a company’s environmental, social and governance (ESG) credentials for reputational gain.

When you consider that most external stakeholders rely on a company’s own reporting to see the benefit of its CSR activities, such cynicism is only natural.

So then the question is: as we enter a new era of corporate sustainability, how then is it best to communicate good CSR policy to your audience?

Go to our PHA Insights Page to read our expert guide on how to communicate CSR policy to stakeholders.