- BRW Lists
Published 10 October 2013 11:38, Updated 26 November 2013 12:10
Businesses have to learn how to thrive in a radically decarbonised world, says Sir Jonathon Porritt. Photo: John Robertson
Could business leaders and entrepreneurs save the world? Sir Jonathon Porritt, founder and director of UK-based think tank Forum for the Future, thinks so.
While passionate about the issue of environmental sustainability, Porritt says he has given up on politicians and believes the problem will be largely solved by citizens and business.
“That’s a really shocking thing for me to say because I spent 40 years trying to get sustainability better understood and advocated by governments but they’re just caught in all sorts of short-term traps,” Porritt says. “The exciting stuff is what’s happening in civil society. . . and there’s so much more leadership being shown in business than in government.”
Porritt describes himself as an optimist, and he has just released a book, The World We Made, describing a positive but possible vision of the world in 2050 and how we got there.
His vision echoes that of Australian futurist Peter Ellyard, author of Destination 2050, as well as MBA program director at Oxford University, Stephan Chambers, both quoted in this story on the Rich 200 in 30 years.
Porritt says there were “no surprises” in the recent report from the Intergovernmental Panel on Climate Change.
“We add more knowledge as we go, but the reality is that nobody really thinks this is just caused by natural factors; everybody acknowledges this is a man-made phenomenon, everybody acknowledges that we’re on a very bad course at the moment and the only way off that course at the moment is radical decarbonisation,” he says.
Porritt points out that the IPCC report is just the first stage and the next stage will come next year when politicians decide how to respond to the science.
In the meantime, business leaders and entrepreneurs should not wait for government action. Porritt says businesses need to set their course by the long-term trends and navigate through any short or medium-term regulatory uncertainty.
“The message is the same for any for-profit enterprise that it’ll be harder and harder to make good, legitimate profit if you haven’t learnt how to cope with a very low-carbon world,” Porritt says.
“If they know where the direction of travel is and see where it has to go. . . companies are quite adept at regulating through regulatory uncertainty and dysfunctional policymaking processes.”
Porritt says he has spent a lot of time in Indonesia, China, India, Brazil and the United States, and wherever he goes, business leaders are not in denial about climate change and its causes.
The exception is businesses with vested interests in burning fossil fuels – though Porritt says many executives will confess to private fears. Any government with a heavy economic dependence on resource extraction, including Australia’s, will be prone to incredibly powerful lobbying.
“Business looks at the same data and they can’t get out of their responsibilities in the way that governments seem able to do because they have responsibilities to shareholders, to customers, to the communities in which they operate,” Porritt says.
“Businesses have to learn how to thrive in a radically decarbonised world – that’s what the science tells every business leader. Once you’ve understood that’s the story, you put your business on the track for success in a world that looks very different.”
Porritt says it is “inevitable” that value will be destroyed as the world reduces its reliance on hydrocarbons, but there are also “massive” business opportunities.
Porritt says the gridlock in the political system can lead people to think the world has been standing still on sustainability issues over the past decade, but that is “absolutely not true”.
During his research, he found an “extraordinary” entrepreneurial spirit and says the opportunity is worth billions.
“I was astonished to discover how rich this innovation pipeline is – you’re talking about energy, water, waste, transportation, raw materials, smart manufacturing, resource efficiency,” Porritt says. “The potential value now in play as we transition to a sustainable economy is staggering.”
For bigger businesses, the challenge is to understand the ferment of innovation already going on, rather than start from scratch.
“At Forum for the Future, we work with a lot of big companies and they all have very different ways of engaging with that world of disruptive innovation,” Porritt says. “Some like to grow their own challenges out to a wider market place. . . and other companies will create internal innovation funds or set up their own ventures.”
Clive Palmer at a mining development in QueenslandRob Homer
As Porritt sees it, Australia has two big challenges ahead. Firstly, we need to prepare for a future without coal exports. Secondly, we need to enable our clean technology sector so Australian businesses can gain a steady footing for exports.
Scientists are clear on the fact that most coal needs to stay in the ground if the world is to avoid catastrophic global warming.
“Year by year, it becomes more certain there is no conceivable reconciliation between a good, prosperous future for humankind and the continuing use of coal,” says Porritt.
Yet Australia is pushing ahead with huge coal mining developments, including the massive Galilee Basin project in western Queensland with Rich 200 members such as Gina Rinehart and Clive Palmer involved in various aspects.
Porritt says investing in a project like the Galilee Basin is risky given that the payback is over decades, but in 20 years’ time, it is unlikely that anybody will be buying coal. (Ellyard made the same point in an interview with BRW earlier this year.)
“China is not going to buy Australia’s coal forever and investors, when they think about the Galilee Basin, need to realise that China has probably a deeper understanding of climate change than any other country in the world,” Porritt says.
“There’s no denial about the science of climate change in China and I think Chinese people would be appalled by the quality of the debate here in Australia.”
However, Porritt says India is “much more problematic”, with huge potential for renewables, especially using biomass for energy, but a lack of business or political leadership on the issue currently.
There is an opportunity for Australian entrepreneurs to export technology and engineering skills to help emerging economies decarbonise – but they need to crack the home market first.
“For an Australian company, the trick is how do you find those export markets if you can’t demonstrate how your engineering skills have brought those solutions to the Australian market,” Porritt says.
“You need government to enable entrepreneurs, innovators and businesses to meet this challenge rather than disable them and that’s my worry about Australia over the next few years.”