Corporate responsibility in a collapsing world
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Corporate Responsibility in a Collapsing World. Cranfield School of Management Jonathon Porritt 29 October 2008. Forum For The Future. A registered charity committed to accelerating the building of a sustainable way of life Solutions-oriented approach

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Corporate responsibility in a collapsing world

Corporate Responsibility in a Collapsing World

Cranfield School of Management

Jonathon Porritt

29 October 2008


Forum for the future

Forum For The Future

  • A registered charity committed to accelerating the building of a sustainable way of life

  • Solutions-oriented approach

  • Over 180 different partners from national, regional and local government, higher education, and business

  • Green Futures magazine

    Mission:

    To accelerate the building of a sustainable way of life by taking a positive solutions-oriented approach


Corporate responsibility in a collapsing world 1174999

JT Group


Corporate responsibility in a collapsing world 1174999

PASSIONATE

about

Sustainable Development

Not passionate about Corporate (Social) Responsibility,

Quality of Life, Corporate Citizenship, CSR, Liveability etc etc


Corporate responsibility in a collapsing world 1174999

The Global Economy:

nothing more than

A House of Cards

built on

A MOUNTAIN OF DEBT

aided and abetted by

Governments’ in Retreat


Corporate responsibility in a collapsing world 1174999

From

Masters of the Universe

to

“A bunch of spivs and speculators”


Jack welch

Jack Welch

  • CEO of GE (1981 – 2001)

  • In 1981, GE valued at $14bn.

    In 2001, GE valued at $400bn

  • “Manager of the Century”

  • “Neutron Jack”

  • Hudson River – Jack Welch’s toxic legacy.


Ge ecomagination a strategy for growth

GE Ecomagination: a strategy for growth

  • GE’s environmental innovation programme

  • High quality products with increased environmental performance

  • Renewable energy, hydrogen fuel cells, cleaner, quieter aircraft and locomotive engines, water purification and desalination technologies

  • Part of GE’s growth strategy – target to increase revenue from these businesses from $10 billion in 2004 to $20 billion by 2010


Corporate responsibility in a collapsing world 1174999

SOCIAL EXTERNALITIES

ENVIRONMENTAL EXTERNALITIES

GLOBAL

ECONOMY


Radical discontinuities

Radical Discontinuities

Social Externalities

Population growth

Worsening inequity

International terrorism

“Clash of Civilisations”

Demographic timebombs

Debt mountains/credit crunches

Environmental ExternalitiesClimate ChangeOil at $100 +Resource constraints (water/soil)Food shortagesWorsening air and water pollution6th “extinction spasm”


Corporate responsibility in a collapsing world 1174999

Capitalism today is the only economic show in town


Creative destruction joseph schumpeter

“Creative Destruction”Joseph Schumpeter

Creative destruction as you have never seen it before as today’s unsustainable economic development gives way to genuinely sustainable economic development


Ipcc consensus

IPCC Consensus

Staying below

2°C

means stabilising

at 450ppm CO2

which means

c. 80% cut

by 2050


Canaries in the mine

Canaries in the Mine

  • Permafrost in Siberia

  • Arctic Sea ice

  • Greenland Ice cap

  • Antarctic ice sheets

  • CO2 absorption rates

  • Amazon Rainforest drying out

  • Acidification of the oceans


Corporate responsibility in a collapsing world 1174999

450

350

550


Stern review

Stern Review

“Climate change is the greatest market failure the world has ever seen”.


Corporate responsibility in a collapsing world 1174999

Get a realistic price

on a tonne of CO2

just as fast as possible


The shrinking earth

The Shrinking Earth


Five capitals framework interdependent and indivisible

Human

Capital

Social

Capital

Capital

Natural

Manufactured

Capital

Financial

Capital

Five Capitals Framework:“interdependent and indivisible”


The five capitals

The Five Capitals

  • Natural Capital

    - any stock or flow of energy or matter that yields life, goods and services

  • Human Capital

    -health, knowledge, skills and motivation required for productive work

  • Social Capital

    - the value added to any activity by human relationships and cooperation

  • Manufactured Capital

    -material goods (tools, machines, roads) which contribute to the production process

  • Financial Capital

    -no intrinsic value itself but reflects the productive power of the other types of capital


Capitalism is dead

This version of……

Capitalism is Dead…

  • Licensed cost externalisation, natural limits defied

  • Deregulation of capital markets: risk and opportunity mis-priced

  • Economic growth credit-fuelled, not earnings-based

  • Profits maximised, greed incentivized

  • Macho CEOs rule the world


Corporate responsibility in a collapsing world 1174999

  • WEALTH WITHIN

  • ENVIRONMENTAL LIMITS

  • - NOT BEYOND!

  • DECARBONIZATION

  • DEMATERIALIZATION

  • CLOSED-LOOP SYSTEMS


Corporate responsibility in a collapsing world 1174999

THE “LAWS”

OF THE MARKET

MUST YIELD TO

THE LAWS OF

THERMODYNAMICS


Changes ahead

Changes Ahead

  • Prices tell the truth

  • Governments reclaim their rightful role

  • The Corporate “Licence to Operate” is re-written


Corporate responsibility in a collapsing world 1174999

“20 years from now you will be more disappointed by the things that you didn’t do than by the things that you did.”

(Mark Twain)


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