February 2008
Big Businesses Failing To "Think Global"
A study commissioned by Accenture is set to reveal that big businesses are falling at the first stumbling block with regard to global warming. Figures will show that in spite of hopes by world leaders that business could contribute technology and expertise to the struggle, 90% of major companies do not classify global warming as a priority.
In fact, the study, which questioned over 500 big businesses in Britain, Germany, Japan, the USA, China and India, saw almost double the number of respondents viewing climate change as a cost to their business as opposed to an opportunity. Most worryingly, with President Bush speaking about "uncertainty" in the US economy, in the short term at least, climate change is set to slip down the list of many companies as they face a possible world recession.
Moreover, the President’s proposed approach of voluntary, self imposed targets will look to be on distinctly shaky ground following these findings. And surprisingly, another body blow to the that approach is dealt by businesses themselves, with 80% wanting governments to take a central in tackling climate change.
Unfortunately, the bad news continues with a mere 5% of firms stating global warming to be their top priority, and of these, not a single one was Chinese. Indeed, a number other aspects were considered a higher priority in a successful business model. These ranked as: increasing sales, reducing costs, developing new products and services, competing for talented staff, securing growth in emerging markets, innovation and technology. Global warming came in at a paltry eighth place. And although companies are undertaking eco-audits and taking steps to reduce their own omissions, a significant number – as many as one in five – are yet to act. Part of this problem may be regulation, rather than recognition based. With 67% of the surveyed businesses agreeing that they have a role to play in combating climate change, only 40% felt that they were in a position to address it.
The report noted that "businesses clearly are seeking long-term signals about where and how to invest. They are reluctant to make big investments in climate change-related initiatives until the scope of future regulation becomes clearer," providing an added impetus for governments to lay down the law concerning the role of companies. This is especially important at the moment because of changing economic conditions, shifting focus away from the environment.
Accenture head of strategy, Mark Spelman was speaking at Davos when he warned that this year was very different from 2007: "Climate change is not going to get nearly the same degree of attention here as it would have achieved if the economic outlook were brighter. Whenever there are underlying economic concerns, people will focus on them."
The Davos talking shop may not be the best indicator to gauge environmental policy shifts, but when world players are more concerned about a potential economic downturn rather than trumpeting their own successes, environmental or otherwise, there is cause for caution. Some critics have even gone so far as to call it a "greenwash", citing a total removal of environmental concerns from the agenda. However, commentators note that issues such as water scarcity, energy security and sustainability issues in developing countries raise a counterpoint to this argument, especially in light of the announcement by Yasuo Fukuda, Japan’s Prime Minister, that there would be a $10bn five year package for developing nations achieving economic growth without endangering the climate.
One thing is clear though; only time will tell what effect the predicted economic downturn will take on the environmental agenda.
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