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• Transformational lessons from the pandemic

  June 26, 2024 10:40 am Comments Off on Transformational lessons from the pandemic

  Has business finally ‘unfrozen’ on climate?

  Freeze // unfreeze // refreeze // slush: where along Professor Gratton’s pandemic disruption curve are we, when it comes to the sustainability revolution?

   

  Happy anniversary.

  As I write this (from home, naturally), it is three years since the start of the first COVID lockdown in the UK. A hard memory for many given all that happened, but an important time to remember and reflect. Just what did the pandemic teach us about work, leadership, and climate – and how can we ensure that these hard-won lessons don’t fade into history?

  This was a major theme for episode twenty of the Conversations on Climate Podcast series, with Professor Lynda Gratton. She has made a career out of the future of work: it is the title of her MBA elective; the council she co-chairs at the World Economic Forum; and the subject of her award-winning book The Shift, published a full decade before the pandemic itself.

  When COVID hit, Professor Gratton was one of the leading voices analysing, in real time, what it meant for the way we structure the working world. Her articles, published in the Harvard Business Review and elsewhere, introduced me to the freeze-unfreeze model – an elegant and powerful concept for tracing organisational change.

  Freeze // unfreeze

  Before COVID, Gratton argues, business practises were ‘frozen’. Despite all the talk about next-generation technology, organisations remained stuck in 20th-century model: top-down and office-bound. It took a worldwide pandemic, and the overnight lockdowns that ensued, to ‘unfreeze’ these practises, creating a forced space for experimentation and adaptation. The results were remarkable, as she explained:

  I wrote the Harvard Business Review article on making hybrid work, and my lead-in case was Fujitsu. The reason I chose Fujitsu is because of all the countries in the world, it’s Japan who find it difficult to change working practices. And yet within a week, Fujitsu had moved 60,000 people from their offices in Tokyo into their home. It took them three days to do it.

  If you’d asked them to do it as a strategy, they’d say: it’s a five-year program, it’s just impossible…[but] one day, all over the world, all companies got thrown into boiling water and they either clambered out of it as fast as they could or they boiled to death.

  What comes after unfreezing? ‘The next stage will be something like “refreeze,”’ Gratton explained in 2021, a process whereby ‘new crystals metaphorically begin to form around new systems and routines.’ But in 2021 we were still in ‘the slush,’ a transitional period in which old and new remained fluid but cooling; best practises were unclear; but the struggle to determine the shape of the new normal had begun in earnest.

  Plotting the curve

  Since recording that episode with Professor Gratton, one question has been circling my mind. The pandemic is now largely in the past; the next great disruption is climate chaos and the shift to truly regenerative businesses and workplaces it necessitates. Where in Gratton’s process are we, when it comes to the sustainability transformation? Is business collectively in the freeze, unfreeze, refreeze, or slush phase?

  On the one hand, there are those who say that we are going through a great sustainability un-freezing. As we wake up to the state of the environment, businesses across the world are recognising that they must change their ways. The explosion in ESG leadership, green product lines, and new climate-focused jobs recently demonstrate the depth of this transformation in business practices. We are in a moment of great disruption – and great opportunity.

  Others argue instead that we are in the slush. They feel that the green agenda has already upended markets and firms, and organisations are frankly struggling to keep up with the pace of change. Old certainties have been sacrificed to the new gods of ESG. In this view, the point of peak change must surely be behind us; now is the time to pause, sort the useful reform from the destruction, and get business back on track.

  Both of these positions are wrong. The former belongs to those climate activists who, in a well-meaning effort to mobilise the majority, are trying to will their future into being through the power of positivity. The latter has the hallmarks of the latest iteration of denialism – climate foot-dragging and calling out the cost of change.

  Whilst they originate from opposite sides of the spectrum, what both of these arguments have in common is a supposition that we have already done the hardest part – given up on the old system. They both proclaim that we have made an irreversible shift into the new world, whilst disagreeing on how far through that necessary process we have come. In reality, we have done no such thing. When it comes to climate, business remains in a state of freeze.

  An economic system on ice

  If you want to know what a frozen system looks like, go to COP. Our marquee climate process is so stuck – so constipated – that it takes 40,000 delegates a fortnight to announce what everyone knew from the beginning, namely that they will need an extension to midnight Sunday before they announce they are kicking the can a bit further down the road.

  Frozen looks like governments talking the talk on the green transition, whilst maintaining hundreds of billions of dollars in subsidies for fossil fuels each year. In the UK, it’s literally called ‘freezing’ fuel duty!

  Frozen is the explosion in the carbon offsetting market – the very definition of wanting to pay someone else to meet a target, without having to do anything materially different as a business.

  Here is my top tip for identifying a frozen system: how often is the answer to a necessary question, ‘that’s going to be difficult’? As someone who hosts a climate podcast, I can tell you that it is an increasingly common refrain as I get further down my list of questions each week.

  Business has changed – I am not denying that. But so far, the majority of firms have stuck to the easy stuff which doesn’t ask much: the mission statements, the audits, the reports, the new sustainability leads. We’ve got recycled packaging, and offset the rest.

  When it comes to real change, our economic system remains frozen in place. Where is the movement on genuine circular economies? Where are the conversations about appropriate scale, finite resources, and regenerative practise? Who is talking about reducing total energy throughput, and finding their steady state? Which business is tackling planned obsolescence, or the creation of unnecessary demand through manipulative advertising and false innovation?

  Yes, well…that is going to be more difficult.

  Let it go

  It will always be more difficult, until one day it’s here and we don’t have a choice, and then it gets done. That is the real lesson of the pandemic. Absent a deus ex machinalike COVID, Fujitsu et al. will always punt genuine transformation five years down the line.

  Professor Gratton may be right that our relative inaction on climate versus COVID is because we don’t yet connect it to our own personal safety. That’s a very deep-rooted story about our alienation from the natural world, a story for another time. But I don’t buy the argument that it is because climate is too complex, there are too many stakeholders, or that we are waiting on the right technology. That is oil-lobby talk, foot-dragging talk, Fujitsu-talk.

  In reality, I think the business world is largely frozen in fear. To borrow another quotation from Professor Gratton (talking about young people looking to learn in the office, whilst experienced leaders stay home): ‘there are lots of observers, but nobody to observe.’ For all the Unilever’s and Patagonia’s and Arup’s in the world, leaders are still waiting for a truly transformative model that looks safe enough for them to replicate. But if we learnt anything from COVID-19, it is that the best-laid plans don’t last too long anyway. Certainty is not a luxury we have anymore.

  After thirty years of process and ever-rising emissions, I don’t know what it will take to truly unfreeze us all. Perhaps it will be the dawning of true panic; perhaps, as with COVID, this panic will be channelled through suddenly-muscular government action. Perhaps we will finally wake up to the reality that our lives, and all that is good in them, are inextricably interlinked with our planet and all our fellow species.

  Whatever the catalyst may be, we won’t hit the unfreeze point until we accept that we’re still frozen. Flattering ourselves that we are further along the curve than we are, won’t help at all. Even if well-intentioned, it’s just another – more subtle – form of denial.

  We’re not yet in the slush. We’re not even unfrozen yet. We’re not even close.

   

  Listen and watch Season 1: Episode 20 – In conversation with Lynda Gratton

  Watch the accompanying conversation on YouTube with Professor Lynda Gratton

  Catch up on Season 1

   

  Article originally published on Linkedin by Christopher Caldwell CEO @ United Renewables | MBA, Sustainability Columnist & Podcast host on April 11, 2023

• Human rights: the next ESG investment frontier?

  June 21, 2024 4:11 pm Comments Off on Human rights: the next ESG investment frontier?

  Expanding the scope of ESG will be good for people, good for the climate and good for the industry itself – if we can more fully rise to the challenge this time.

  It’s remarkable, when you think of it, how many humans are dedicating their life’s work to completely reshaping the world around a single molecule. That is the reality of the climate change movement today: it’s all about CO2.

  This might sound surprising coming from someone who runs a renewable energy company (less so if you’ve read my previous articles) but I wish it wasn’t. To get serious about our ecological crises, we are going to have to widen our scope of understanding. Climate change involves more – much more – than a simple forcing effect around atmospheric levels of one molecule.

  My favourite part of our episode with Cathrine de Coninck-Lopez, Global Head of ESG at Invesco, was when we shifted the conversation beyond the narrow bounds of carbon. Cathrine, a scientist by training, has long had an interest in biodiversity as another facet of the environmental challenge, and it was great to get her thoughts on the Montreal Conference (and nice to talk about the COP that worked!)

  It was in that spirit that I asked her: what do you see as the next frontier in ESG finance? Which other issues are rising up to the surface of consciousness in the investing world? Here is her reply:

  “Human rights. It is a big topic that is not universally agreed upon. What we are trying to do right now – and what we’ve actually done just in our research framework, in our proprietary rating system – is we have included some new data to start scoring companies on human rights.”

  It seems obvious, but human rights have been rather MIA in the ESG world. Correcting that could have profound implications for ethical investing – and climate too.

  Why ESG needs human rights, right now

  An increased focus on human rights in the asset management world is fantastic in and of itself. They are such a critical part of human flourishing and deserve just as much attention as climate change. They have existed as an activist concern far longer than climate has, and dominated political conversation as recently as the pre-2008 era, as the post-9/11 security state was constructed around surveillance, rendition and torture. More recently, climate has sucked up all the oxygen; perhaps a necessary corrective but not a sustainable one.

  Work on human rights remains as necessary as ever and would benefit from any renewed attention ESG can bring to bear. But I also believe that the ESG movement itself would benefit equally as much. I’ve written before about the problems and opportunities within the ‘wobbly stool’ of ESG, where Governance gets short shrift. Human rights will give more heft to the Social element, and anything that brings the three pillars into more balance is for the best.

  More importantly, it represents an opportunity to move away from our current obsession with quantification. Let’s be honest: at least some of the popularity of climate within finance is because counting carbon is easy. The consequence is a dumbing down of ethical investment. The Social pillar of ESG, beyond some simplistic measures of diversity, has been left behind exactly because it is more diffuse and qualitative, and therefore seen as more challenging from a bean-counting perspective.

  Human rights don’t lend themselves to quantification, but they do feel a lot crunchier than other social issues. Rights also have a moral backbone which is much harder to dismiss as wishy-washy or woke, and most people would say they recognise rights violations when they see them. El Salvador’s prison system, women’s rights in Afghanistan, Russian political repression, indigenous land grabs… there’s not much arguing with these realities. Thus they are more resilient to misinformation and denial, which means we can get on with the job of fixing problems rather than having to defend their existence.

  Climate is a human right

  Which brings us to the question of how human rights and climate change are connected. Most obviously, a stable climate is surely one of the most fundamental rights, in and of itself. Liveable ecosystems, clean air and water, relationships with the land and other species… that there are no explicit environmental rights in the Universal Declaration of Human Rights says a lot about the myopia of the post-war Western culture than authored them and is surely due for correction.

  Climate breakdown will have devasting impacts on other aspects of human rights too. It will destroy communities, sink ancestral lands beneath the ocean, and drive migration and famine. In many places, it may accelerate autocratic control and despotism. It’s easy for us in the West to imagine this happening in places like China and Singapore, but we might have the humility to notice the crackdowns on environmental protests in our own backyards. From the militarised invasions of indigenous lands at places like Standing Rock, to the increased use of SLAPPs (Strategic Lawsuits Against Public Participation) by corporate power, to the Police, Crime, Sentencing and Courts Act in the UK attempting to make environmental protest ‘almost illegal’ – Climate activism is increasingly dangerous here at home.

  It is also worth considering the relationship from the other direction: does promoting human rights help combat climate change? The answer is surely yes. They share the same root philosophy, an understanding that human flourishing comes not from dominance and control of others (be they other humans, or the land and other species) but is rooted in values of respect, care, and reciprocity. Tending to one of these concerns nurtures the same root values that support the other.

  Furthermore, we should understand climate change as a product of a world that feels fundamentally unsafe for so many people. Environmental destruction and war, for example, are intrinsically linked – just look at the ties that bind the conflict in Ukraine and fossil fuels, and consider that the US military alone, if it were a country, would be the 55th biggest emitteron the planet. Anything which promotes rights and peace will reduce our destructiveness not only against each other but against the planet too. I believe too that when people can rest in a position of genuine psychological safety, they will be more supportive of the climate message; greed, short-sightedness and consumer addiction all flourish in environments where basic human needs go unmet.

  Getting rights-based investing right

  So ESG needs human rights, and rights-based investment will be good for the climate too – but only if we can get it right. Here is an opportunity to refresh ESG not only in scope but in rigour too.

  To my mind, this centres on the question of who decides what counts. The history of ESG has been fairly spotty in this regard, with far too much greenwash and tepidness in the selection and rating criteria. Fund managers don’t want to underperform benchmarks; asset managers fear moving too far, too fast; and ratings groups have no interest in rocking the boat given the bulk of their business comes from existing exchanges and indices. The result is too many ‘ESG’ funds are still haunted by oil companies, miners, and the financial firms who fund them – perhaps weighted down by a percentage point or two. It’s not good enough anymore.

  Integrating human rights into ESG offers a chance to do things differently. The FTSE 100 is full of companies with pretty glaring track records on human rights – from Shell’s complicity in the extra-judicial killings of peaceful protestors (the Ogoni Nine) in the Niger Delta in the 1990s, to Rio Tinto knowingly blowing up a 46,000-year-old aboriginal sacred sitein 2020. It surely is more difficult for ratings agencies and index compilers to include these in a human-rights-aligned index – unlike the muddying of greenwash, we all know a rights abuse when we see one.

  Perhaps we should go one step further. The human rights world has some venerable, deeply respected, and widely recognised third-party authorities, from Amnesty to Human Rights Watch to Transparency International. Why not invite them to take part in helping design, benchmark, and rate firms for human rights within an ESG investing framework? Leaving this job to financial insiders allows them to mark their own homework, or simply shrug and hide behind fiduciary duty or client demand. If the industry wants to get serious about doing ESG with rigour, they should invite real experts to the table.

  For all these reasons, I’m hugely in favour of human rights becoming the next frontier in ESG investing, for the climate as well as for their own sake. It won’t be easy – human rights washing will be much harder to pull off than greenwashing. But it is the confrontation the financial industry needs, to finally get serious about creating markets that are truly part of the solution.

  This article was originally published on LinkedIn in by Christopher Caldwell CEO @ United Renewables and MBA, Sustainability Columnist & Podcast host on March 22nd, 2023

   

  If you loved this article you may also enjoy reading the articles below.

  The selfish case for climate reparations

  Bloom and bust – regenerative business lessons from a microalgae start-up

  Our sustainable future will be no-size-fits-all

  The wobbly stool of ESG: what does governance have to do with climate change anyway?

  May a hundred ‘small experiments’ bloom

   

  To learn more about United Renewables and what we do visit our ‘About Us’ page.

• May a hundred ‘small experiments’ bloom

  4:03 pm Comments Off on May a hundred ‘small experiments’ bloom

  Climate change today is a failure of negotiation. The re-frame we need might be less high-stakes – and more every day – than you might think.

  It was only when Matthew McConaughey, shirtless, battered, and bleeding was wrestling a Malian village strongman in the Dogon Bandiagara that I think I finally understood this recent episode of Conversations on Climate.

  Ok, that’s not strictly accurate. The teaching in question comes a few pages earlier in Greenlights, McConaughey’s wonderful 2020 memoir-cum-philosophy of life. (And boy do I recommend that book!) But when I say it shed new light on my guest Kathleen O’Connor’s world-leading research on negotiation, I mean it. See what you think.

  The story goes like this: Twenty years ago, McConaughey shaved his head and set off to chase a prophetic dream he had from Hollywood to Africa – a classic quest for spiritual renewal. Eventually, he finds himself in Timbuktu, where he wraps a day of camel racing with dinner for his Malian guides. An argument breaks out amongst his new friends over a question of morality and religion, which becomes increasingly loud and heated. After listening to the two sides, McConaughey decides it is time for his voice to be heard, with unexpected results:

  [McConaughey:] “I believe Ali is right, I think-“

  Just then, Ali, the guy whose side I was agreeing with, snapped at me,

  “It is not about right or wrong. It is ‘Do you understand?!’”

  Slightly stunned, I leaned back in my chair sheepishly as Ali stared at me with sobering vengeance…

  They are not trying to win arguments of right and wrong. They are trying to understand each other.

  A SHIFT in perspective

  Unless you’ve been living under a rock for the past decade, you know that climate change has a negotiation problem. More specifically, it is one of those issues – a wicked problem, if you will – which can only be solved through global collaboration, even as it makes that collaboration incredibly difficult to achieve.

  The smart people in the room have known this since the beginning, which is why the UN Climate Change conferences system was born from the Rio Earth Summit way back in 1992. Since the beginning, the process has been rooted in principles of discussion, collaboration, unanimity, and (nominal) equality amongst the signatories. And it speaks for itself that, after thirty years of earnest work by the top negotiators in the world, we have just had another record-breaking year of carbon emissions.

  Climate negotiation isn’t working – or at least, not nearly fast or far enough to meet the problem. We need to do better.

  This was very much on my mind last year – and I’ve hardly been shy about my views of COP. So I was excited to be able to interview Kathleen O’Connor, Clinical Professor of Organisational Behaviour at London Business School and a world expert on the psychology of negotiation, for the podcast. It felt like the perfect episode to be released in early 2023, in the hope that it might auger well for another critical year.

  Kathleen’s insights were too numerous and subtle to be able to summarise here, but we did close out the show with an explanation of her SHIFT© model, which she uses to teach MBAs and executives how to become better negotiators. The five components are:

  • Separate other people’s interests (what they need) from their positions (professed outcomes)
  • Hear the other person, rather than simply waiting to talk
  • Invest in the relationship, and value each other
  • Frame negotiations as a problem to be solved.
  • Think creativity to find new solutions

  Oh yes, I thought – a neat little acronym that is exactly the kind of thing that I used to love in business school. But how is that going to help us get China and the US lined up at COP28, let alone deal with Saudi Arabia?

  Enter Mr. McConaughey. His story – as odd as it may have seemed at the top of this article – finally made Professor O’Connor’s pieces come together for me, albeit a few weeks later. Because what she is calling for is a complete reframing of our idea of negotiation itself.

  Negotiation is not adversarial. It is collaborative

  Negotiation is not about beating someone else. It is about creatively discovering shared solution space.

  It is not about expressing the best argument. It is about being able to most faithfully understand the other’s perspective.

  “It is not about right or wrong. It is, ‘Do you understand?!’”

  Re-negotiating negotiation

  I don’t want to spend any more time here on COP and the global climate game. Kathleen’s analysis, models and ideas have deep implications for how we might (re)structure and conduct climate negotiation. Her analysis of why it’s so stuck is certainly worth hearing. Today, I’d rather leave you with something more actionable in your own life.

  Beyond the SHIFT model, my favourite part of my conversation with Kathleen was her approach to driving change – what she called ‘small experiments in high-value behaviours:’

  ‘I love the idea of experiments. I think people are more likely to do something different if they think it’s an experiment than if they think it’s a project or initiative. I think there’s something about experiments that means you can not find success, [but] you learn something, you keep moving.’

  I love this too. It’s the best technology for negotiation, and for working with others towards change in general, that I’ve come across in a while. Firstly, experiments lower the stakes; when there is no winner, conflict is de-escalated as we all become part of the same experimental team.

  I also think it is a great framework because experiments create direct, experiential knowledge before they invite us to come to a conclusion. That is the opposite way around to the driving forces of today’s culture. Modern media, technology, and culture wars are driven by the idea that we must all have opinions about everything all the time – and that these opinions (because we have worked so hard, genuinely, to parse them out of the info-tsunami) have value.

  In truth, mostly they don’t. A lot of modern ‘conversation,’ especially on social media, in the news, and around dining tables, is us all talking about things we have almost no direct experiential knowledge of, buttressed by the borrowed conviction of ‘expert’ filter bubbles (and who amongst us bothers attributing our opinions?) The result is that everyone is ready to talk, but few are willing to listen.

  By contrast, a small experiment puts that cultural training on hold. Instead of already knowing what we think, we are invited to find out together, person to person. We find a shared interest; re-frame it as a collaboration; find a creative new approach to try; and the whole thing is an investment in that personal relationship. It is a SHIFT.

  Form and outcome

  If you want to try this, there are two types of experiment you could run. The first would to trial a climate-positive outcome. Let’s say, for example, you wanted to encourage more shared parental leave at your organisation – because raising the next generation as happy, securely-attached and trauma-free is one of the best things we can do for the planet right now. Rather than decide you need to go negotiate with HR, why not frame it as a small experiment, with yourself as a willing guinea pig?

  The alternative, which is where I’ll be putting my focus, is playing more with the form of communication itself. I want to continue my quest to help us all have better conversations about climate and everything else.

  For example, I would invite you to run a simple, profound experiment in Non-Violent Communication the next time you have a suitable meeting with a trusted colleague: whenever it is your turn to speak, can you start by summarising what you heard the other person say?

  This small ‘experiment’ can have remarkable effects. It helps you listen to truly hear the other. It helps them know they’ve been heard and respected. And it allows you to quickly correct misunderstandings.

  Try it and see. And if you’re still not sure how to get that conversation started, here’s one last tip – an opening line:

  ‘I heard this great story the other day. So Matthew McConaughey was on a spiritual dream-quest in the African desert…’

   

  This article was originally published by Christopher Caldwell, CEO @ United Renewables | MBA, Sustainability Columnist & Podcast host on Linkedin on March 8th, 2023

   

  If you loved this article you may also enjoy reading the articles below.

  The selfish case for climate reparations

  Bloom and bust – regenerative business lessons from a microalgae start-up

  Our sustainable future will be no-size-fits-all

  The wobbly stool of ESG: what does governance have to do with climate change anyway?

   

  To learn more about United Renewables and what we do visit our ‘About Us’ page.

• Why I’m swearing off engaging with climate denial

  3:58 pm Comments Off on Why I’m swearing off engaging with climate denial

  Arguing with deniers doesn’t work; let’s focus on encouraging action amongst our allies instead

  Climate denial is as old as our understanding of climate change itself. I’m sure that even Theophrastus (fourth century BCE Greece) or Shen Kuo (Song dynasty China) had their scientific observations met with a fair share of shrugs, frowns, and outright laughter. Sadly, after decades of modern efforts to raise awareness of our inbound anthropogenic climate catastrophe, denialism remains an inescapable feature of the landscape today.

  I won’t give the main offenders any more oxygen by calling them out here – we know who they are, both as individuals and corporations. What is worth highlighting is the way that contemporary denialism has become an adept shapeshifter in response to the success of the wider climate movement. Flat-out (flat-earth?) denial still exists, although it looks lonelier by the day; but it is being replaced by more subtle forms of foot-dragging, distraction, relativism, greenwashing and greenhushing.

  Anyone who has been in this game a while will have their war stories from engaging with deniers. It is exhausting – not only emotionally, but also in terms of time, energy, resources, and attention. No wonder swathes of the climate community suffer burnout and issue fatigue.

  Today – and in the spirit of belated new year’s resolutions – I am swearing off engagement with climate denial completely. Frankly, this decision has been coming for a while. In 2022 I decided to approach skeptics as partners rather than opponents. I still believe in that approach for those who are open to a conversation in good faith. But denialism is something else – and a recent conversation with the brilliant Zoe Chance LINK made up my mind for good. Zoe is an Assistant Professor at Yale School of Business, the author of Influence is your Superpower, and a growing activist in the climate space. All of which means she was able to offer the behavioural science and psychological insights that transformed my long-held hunch into a clear path forward.

  Here is the case for giving up on denial for good. But first, why do we think engaging with deniers is so important in the first place?

  The Case for engagement – targeting ‘social referents’

  The urge to get into the ring with climate deniers is a natural one, and founded on a genuine insight: if you want to make an impact, start with the influential people. Sadly, a small number of climate deniers have been having an outsized impact for too long. Again, I won’t give them the space here – but a cursory look at the history of right-wing think tanks and the Republican party in the US should be all the evidence we need.

  For an interesting parallel, Professor Chance pointed to high-school anti-bullying campaigns. One Princeton study found that, by targeting efforts at just the most influential children (so-called social referents) rather than the entire student body, schools saw greater reductions in conflict. This kind of social network mapping focuses our limited persuasive resources on those who will, in turn, be able to persuade others most effectively. In focussing on climate deniers, we are instinctively targeting those nodes of greatest influence on the other side of the conversation.

  Why arguments fail

  Unfortunately, trying to convince these people just doesn’t work – and behavioural science can also explain why.

  Firstly, we all suffer from false polarisation bias. This psychological finding observes that people on two sides of an issue generally believe that their opponents are more radical than they really are. The result is that we over-estimate the gulf between us, which makes it even harder to approach debates with an open mind and a generous view of our opposite number. This certainly rings true in the climate debate, with both sides seeing the other as extremists – mad, bad, or simply blind to the truth.

  Secondly, denialists are generally too deeply committed in their positions to be open to change on a psychological level. We all suffer from loss aversion – the sense that giving something up is more painful than gaining something new. It is easy to forget that this applies to our beliefs and public positions too. Asking someone to publicly change their mind involves a lot of sacrifices; and, as status quo bias teaches us, it’s much easier to ignore new information and stick with what we know. Zoe pointed to Bret Stephens as a recent high-profile convert to climate change; but even here some within the climate community have questioned how far he has really been able to let go of his old positions.

  Perhaps most profoundly, we humans just don’t take well to overt attempts at persuasion – particularly when the other side’s argument is deemed bad news. In the face of fear, our System 1 lizard brains (the alligator, in Chance’s metaphor) kick in, and our deliberative System 2 brain (the judge) is relegated to the back seat. As Chance put it:

  The reason that I chose the analogy of the gator is because gators are super, super lazy. They’re so efficient that they have a brain the size of a walnut and body that weighs half a ton… and so gators spend almost no resources on thinking or acting. They can go up to three years without eating anything at all. They’re constantly scanning and perceiving, but in almost every case what they’re actually doing is nothing.

  Constantly perceiving, but doing nothing – that image will be sadly familiar to anyone who has tried to convince a denier of the urgency of the climate cause.

  Priming for action

  I’ll be honest here – given up on deniers is a bit of a relief. I agree with Chance that we have been wasting a great deal of energy on those who are most difficult to reach. Furthermore, letting go will release all those resources for something more constructive – convincing those who agree with us to take more concrete action.

  ‘There are so many of us who are believers, but we’re not yet actors; or we are actors, but not to the degree that we could be,’ Chance said. Our focus, therefore, should be to ‘mobilise the willing.’ None of us are strangers to the fact that the scale, complexity, and urgency of this crisis can be paralysing, no matter how committed one is to the cause. Now that we have won over the majority, we need to help them overcome any such blocks and convert understanding into action.

  This is where Professor Chance’s last behavioural hack comes in: implementation intentions. This takes a lofty goal and concretises it into a clear set of if-then steps. Simply going through this planning process in advance – in the form of a conversation, say – primes the brain to store and subsequently activate the desired behaviour when the cue arises. This process – creating strategic automaticity – recruits our System 1 brain to help achieve the goal selected by System 2. Or, in Chance’s image: ‘your judge has made the plan, but the gator has set an alarm clock.’

  To take an example close to my heart, let’s imagine we have a friend who is new to the climate cause and wants more renewable energy in their local area. We can help set their implementation intentions with a few simple questions [assuming the following answers]:

  • Who could you speak to about making that happen? [their local planning department]
  • How will you work out how to contact them? [look up the head of planning on the local government website]
  • When will you do that? [Saturday afternoon, after my morning run]
  • What is the first question you will ask that person? [What are the barriers to installing more solar on our local buildings]

  Now, when Saturday afternoon rolls around, our friend’s gator brain alarm clock goes off, and they know exactly what concrete actions to take. And regardless of how that first effort pans out, the biggest barrier to action – taking a first step – has been overcome.

  This is what becoming a climate influencer can look like. We don’t all need a book deal or a million followers to make an impact. We can start by helping those closest to us turn attitude into action.

  It’s easier, gentler, and much more likely to succeed than wading into another Twitter debate with a climate denier. Above all, it works; and easy, gentle, and successful sounds like a recipe for a great 2023 to me.

   

  This article was originally posted on LinkedIn by Christopher Caldwell CEO @ United Renewables | MBA, Sustainability Columnist & Podcast host on February 22nd, 2023

   

  If you loved this article you may also enjoy reading the articles below.

  The selfish case for climate reparations

  Bloom and bust – regenerative business lessons from a microalgae start-up

  Our sustainable future will be no-size-fits-all

  The wobbly stool of ESG: what does governance have to do with climate change anyway?

   

  To learn more about United Renewables and what we do visit our ‘About Us’ page.

• Stuck in the twilight zone: why today’s climate start-ups have an exit problem

  3:48 pm Comments Off on Stuck in the twilight zone: why today’s climate start-ups have an exit problem

  What happens to a regenerative start-up ecosystem when it is missing aligned buyers?

  The latest episode of Conversations on Climate, with Godefroy Harito and Jules Buker, set a personal record that I don’t think we’ll surpass for quite some time: our youngest guests so far. At just 26, these two co-founders of treeapp (along with their other co-founder, Leo Ng) are firmly Gen-Z, and naturally we came to talk about generational perspectives on climate and business. It was a great opportunity for me to ask the kinds of questions of young leaders I have been thinking about for a long time – and the answers (whether they were explicit or implicit) have left me with a lot of reflections.

  The first thing that struck me is that there really is something different about this generation. I don’t want to reinforce stereotypes or generalise too strongly, but I got a real sense that I was talking to two climate-native young people, driven to think about our ecological crises from the understanding that they are fated to live the consequences for their entire lives. Sadly, that means they will experience some of the worst of it towards the end of the century unless we radically change course, and they were viscerally aware that there is no planet B. In person, it was clear why so much of the energy and urgency behind the climate movement is being generated by the young.

  Have Gen-Z climate entrepreneurs gone beyond contradiction?

  What was also striking was that they saw no contradiction between climate consciousness and the desire to make a great success of starting a business. In comparison to my conversation with Sam Baker, for example, they seemed very confident that climate change was the necessary background scenery for building their careers – and that there was little in the sense of a conflict (morally or practically) between Gaia and Mammon. Perhaps this is the simple optimism of youth; or perhaps there has been a true permeating in climate consciousness from Greta and the school strikers, out to young entrepreneurs fresh from business school.

  I’m not going to unpack that as a moral problem today. It is easy to be messianic in the face of such a profound crisis as this; but after talking to climate VC Amory Poulden, we shouldn’t be snobby towards this new influx of people who want to make money in climate. It’s wonderful that they want to bring their talents and resources to bear on the problem of sustainability. Harito and Buker seemed to understand, as a matter of instinct, that if green start-ups aren’t going to make money then we aren’t going to move this mighty machine of global capital behind the transition.

  Nonetheless, I was left with one nagging question at the end of our conversation: what is the exit strategy for today’s climate start-ups?

  A beginning in search of its end

  I put this to Harito and Buker slightly differently, but the sense is the same: would you sell to Coca-Cola, or to Shell, or Facebook? It’s a tough question, but it’s also something of a false one.

  Here is the business reality as I see it. There are two types of dream nurtured by founders. The first is to create the next transformational business empire which will allow you to reshape the world around you for decades to come. This is the realm of the Zucks and Musks amongst us, for whom there is no real exit at all – only an ever-expanding horizon of opportunity and domination.

  The second dream is more humble, and more realistic: identify a problem of manageable size; make something that fixes it; built it out until it clearly works; and then sell it on to the highest bidder.

  The vast majority of founders are type 2 dreamers; and many people who start out as type 1’s find themselves ground down into type 2 realists over the years. There is nothing wrong with that because it simply recognises the world as it is. Many try their hand in the Colosseum, but few survive, and only a select few of those go on to become great names.

  The numbers bear this out. A report by Triple Point Ventures and Beauhurstfound that, of the 781 start-up exits in 2021, over 93% (732) were acquisitions. Only 49 rang the bell on an IPO – and I would challenge you to name more than a couple of them. A trade sale is always the most likely successful outcome for any budding start-up.

  The trouble for something like treeapp, a business that is putting genuine sustainability at the heart of what they do, is that its natural buyers (firms that meet its rigorous green credentials, whilst also having the scale to acquire) don’t really exist yet. We are still in the dying years of the old giants. For all that some may be trying to move in the right direction, they are still the most polluting and destructive firms on the planet.

  Credit Kudos x Apple

  For a time, in the early 2000s, it looked like Big Tech would be the answer. That dream has soured. Few look at Alphabet, Facebook (now Meta), or Amazon as the good guys anymore, on sustainability or any other measure (privacy, monopoly, public health, or your own personal poison of choice). When I read that Credit Kudos – an impact pioneer of open banking – was acquired by Apple last year, as one of the first big venture impact fund exits, it hardly felt like a safe pair of hands in terms of purpose.

  Interestingly, Big Society Capital – one of the impact backers of Credit Kudos back in 2017 – seem to have had similar thoughts, at least according to this post entitled ‘What determines a successful exit for an impact start-up?’As they delicately put it, the sale to Apple is ’the most complicated exit scenario from an impact perspective.’

  The case for selling out, as BSC see it, comes down almost entirely to scale. Apple have the heft and the platform to take Credit Kudos’ positive model and build it out. But scale, like power, tends to corrupt, as the history of Apple itself shows only too well. The other advantages listed – that it might mean Apple suddenly cares about impact, or that it will send positive market signals – strike me as of the ‘fingers crossed’ kind.

  The case against is rather more realistic – that the buyer will put dollars above purpose, dilute exactly what made the business impactful in the first place, and the subsequent culture clash would hollow out the teams that drove the mission in the first place.

  Of course, there will be times when an exit does manage to preserve purpose – through independent boards and the like – but as time goes on, cracks almost inevitably appear. A look at how the Ben and Jerry’s brand has fared since it was bought by Unilever shows that even the success stories have their struggles.

  The way out is through

  The quandary for today’s entrepreneurs looking to build a different kind of business is that the nuts and bolts of the start-up lifecycle still operate according to the old playbook. It’s great that they are trying to drag the old version of capitalism into a sustainable tomorrow; but that tomorrow does exist yet, leaving them in an exit-less twilight zone.

  What we need is more of today’s truly sustainable cleantech start-ups to go all the way – to make it into the next giants, rather than sell out to yesterday’s giants. That first generation of regenerative mega-firms will then have the deep pockets, as well as the genuinely sustainable DNA, to buy up the saplings without diluting or extinguishing their impact.

  Ultimately, that future rests on all of us. If we want some of today’s climate start-ups to make it to elderhood, then we need to open our wallets and make them our destination of choice. That is how we make the sustainable start-up pipeline of tomorrow begin to arrive.

   

  Originally published by Christopher Caldwell, CEO @ United Renewables | MBA, Sustainability Columnist & Podcast host on Linkedin – February 9th, 2024.

   

  If you loved this article you may also enjoy reading the articles below.

  The selfish case for climate reparations

  Bloom and bust – regenerative business lessons from a microalgae start-up

  Our sustainable future will be no-size-fits-all

   

  To learn more about United Renewables and what we do visit our ‘About Us’ page.

   

• Innovation and profit in the climate age: so you think you’re Jimmy Hendrix?

  February 20, 2024 1:41 pm Comments Off on Innovation and profit in the climate age: so you think you’re Jimmy Hendrix?

  Raise your hand if you’re ambidextrous.

  Let me try that again – raise your other hand if you’re ambidextrous!

  I don’t know many genuinely ambidextrous people. If you’ve ever tried that internet challenge where you brush your teeth with your other hand for a month, you know it’s not easy. At least at first, you’re going to end up with a lot of toothpaste all over your face.

  

  But when I talked to Professor Julian Birkinshaw – Vice-Dean of LBS, author of business books people actually read (like Fast/Forward), and all-round management genius – he was all about ambidexterity. We got deep into how real-world businesses are facing the climate crisis, and how they’re going to manage to transform themselves without ending up with the proverbial toothpaste all over their faces. His answer – it’s all about organisational ambidexterity.

  Hold on, Chris – what does that even mean?

  The idea is simple: when the world changes around them, businesses need to change too. Disruption = innovation.

  But – and this is a big but – these businesses only exist because they are already very good at something they know how to do. And if they suddenly stop doing that one thing, they’re going to find that the cash stops rolling in. Survival = profitability.

  Businesses need to care about both of these equations. They need to make both of these identities work at the same time. This is organisational ambidexterity.

  Sincere apologies for what I’ve done to the humble equals sign in this graphic:

  Survival = profitability

  A is for ambidextrous, A is for Apple

  For a case study, look no further than Apple. This is a company that has been blessed with two of the greatest leaders in living memory – Steve Jobs and Tim Cook. These two giants represent the left and the right hand of the business to me and show what can happen when you combine creativity and traditional tight management.

  Jobs was the visionary. We don’t need to recapitulate the full soap opera of his time variously leading and not leading the company; it is enough to recognise that Jobs brought an attitude to the disruption that allowed the firm to pretty much reinvent modern technology as we know it.

  Disagree? Feel free to call or message me and explain why. Oh wait, you’re using a smartphone…?

  The mac, iPod, iPhone, and iPad – heck, even Pixar – pretty much invented their own categories. So what became of Apple when Jobs died in 2011? Many people sold their stock as soon as they heard the news, convinced that was the end of the road for the most disruptive company of its time.

  And what a mistake that would have been. Apple’s share price has done 10x since his funeral and reigned for years as the most valuable company in the world. (Then again, if you were invited to Jobs’ funeral you’re probably doing just fine for money!)

  

  The answer is Tim Cook, and his willingness to play to Apple’s other strengths at the same time. There have been attempts to create new products since, but honestly – who here is going to claim the apple watch changed the world?

  What has changed everything for Apple’s shareholders is Cook’s laser-guided focus on profitability. Well, if you’re going to put an ex-head of operations in charge, what do you expect? The core engine of the company is the iPhone, with its fabled 100%+ markup. Despite being a grizzled teenager of a product – over 15 years old this year, an eternity in tech – Cook has managed Apple’s pivot from disruptor to mature cash generator. By masterfully managing supply chains (including through the COVID nightmare), reinforcing apple’s platform moat, and staying supple enough to keep services revenues flowing around core hardware, he has kept Job’s innovative legacy pumping out returns for shareholders.

  So there you have it. A company that can not only brush its teeth with both hands – it’s playing left-handed guitar solos at Woodstock. And there aren’t many who have done that.

  

  And now we return to our scheduled programming – climate change

  This is all well and good, but does it stand up as an approach for companies facing climate change? I’ve got to be honest – it’s a damn big ask.

  To my mind, organisational ambidexterity in the face of climate change means being able to do two things at once:

  • profit-making in the classic mould (find the cheapest possible production methods, screw down hard on them in the short run, and see shareholders as your only constituents in the world)
  • transitioning to genuinely sustainable new practises (decarbonisation, closed-loop circularity, purpose-led decision-making that centres a wide range of stakeholders)

  To which I might say – that sounds great! Now…where is it?

  This is where the Apple story is instructive again. Yes, Jobs and Cook represent the balance of disruptive innovation and old-school management. But critically, these two approaches were in series, not in parallel – and the order matters.

  It’s always easier to innovate first, and then settle into a pattern of mature market exploitation. For firms that started out with a core product designed to solve climate or other crises, then balancing both creativity and profitability works out just fine.

  Going the other way – which is what 95% of companies are being asked to do around climate – is much, much harder. If your entire model of historic profitability rests upon cheap carbon, untaxed pollution, and people-chewing Chicago capitalism, then it doesn’t matter how many transition units you set up, new green products you create, or PR firms you hire.

  Climate change isn’t just a new vertical you can silo off. it’s not an add-on to your existing range. It’s not a special situations fund. Climate. Is. In. Everything.

  Genuine innovation means you’re going to have to put the vast majority of your existing business model in the bin, and that is a very tough thing to do. That’s not asking someone to be ambidextrous. It’s asking them to play the guitar with their feet.

  When sacred cows rise from the dead

  Let’s dive into another case study that’s instructive here – Danone. In 2014, Emmanuel Faber was made CEO of the global dairy giant, and he very quickly took an ambidextrous approach to climate. Danone’s core operations – in milk and yoghurt, formula, and bottled water – continued to deliver strong returns. At the same time, Faber began to push the company in a genuinely climate-conscious direction. He created the One Planet Business for Biodiversity coalition; bought plant protein companies such as WhiteWave; and won board approval to declare the company an enterprise on a mission. He also pioneered the idea of carbon-adjusted earnings per share (CAEPS) to put climate rigour into company accounting.

  

  Less than a year after he declared he had “toppled the statue of Milton Friedman” in the firm, he was himself toppled by shareholders in March 2021.

  What does this tell us about the pursuit of ambidexterity? It’s a nightmare for any genuinely climate-conscious leader in a big old firm like Danone.Faber’s measures weren’t even that extreme – some M&A, Science-Based Targets for absolute and relative Scope 1&2 emissions that were Paris compliant…heck, even carbon-adjusted earnings-per-share is still an earnings-per-share metric! Any sensible accountant who can see the hammer that is carbon taxation coming down the line should be able to get behind this innovation. And yet, for the shareholders, it was still too much change.

  The hard reality is that Danone’s business is animal agriculture, and that is brutal to the planet. Yes, there are lots of ways to make cattle farming more sustainable, and even regenerative – but they all involve small, local and free-range systems centred around agroecology or soil regeneration. A multinational like Danone is never going to look like Joel Salatin’s Polyface farm – and certainly not if it intends to continue to make its existing products in a profitable fashion. The more likely reality is that, pressed into a corner in coming decades, Danone will decide that climate-forward innovation means genetically engineering lab-grown udders out of seaweed that eat their own methane farts. Don’t hold your breath.

  Time to Get Real

  

  Of course, there is one way to learn to play the guitar with your feet. And that’s to lose both your hands.

  Frankly, that’s the more likely route for these companies that talk a good game on climate, but under the surface are wedded to BAU. Physical reality will eventually just stop them in their tracks. As Emmanuel Faber has pointed out, agriculture is perhaps the most climate-exposed economic activity going. If it doesn’t completely change of it’s own accord, it will be forced to anyway.

  I believe in ambidexterity – but it has to be real. It doesn’t mean talking to the left, whilst moving to the right. It must be genuine, evidence-based, and irreversible. Climate change is going to ask firms everywhere to do things differently, forever. This isn’t a one-month internet challenge.

  I’ll leave Faber himself with the last word:

  Interviewer: Do you think the next generation of CEOs is going to be quite different?

  Faber: The next, I don’t know. But the next-next? I think yes. Maybe they will not join the companies. That’s the point…

  They will leave these large companies, in which case I think these large companies will simply not survive, because they will not have the skills…

  Put it this way: if you’re not able to lead climate strategy 10 years from now, you should not be a CEO. It’s as simple as that.

   

  Written by Chris Caldwell CEO of United Renewables, originally published on Linkedin on December 20 2022

   

  If you liked this article you may like:

  Are Renewables Firms are Ignoring Government Relations?

  How Decision Making and Judgement affect Climate Change

  Burning out and burning up: lessons in sustainable management from Henry Ford’s mad utopia

• Burning out and burning up: lessons in sustainable management from Henry Ford’s mad utopia

  1:24 pm Comments Off on Burning out and burning up: lessons in sustainable management from Henry Ford’s mad utopia
  The way many businesses treat their workers echoes the way we trash the planet. Time to rethink the outdated management approach common to both.

  Deep in the Amazon rainforest, nearly 200 miles south of the Brazilian city of Santarem, lies abandoned one of the strangest chapters in the history of the American dream. Visitors to the area today, after making the long journey down the Tapajos river, would know they had arrived by the sight of a Michigan water tower peering through the jungle canopy. That classic image of 1920s Americana stands watch, like a long-legged UFO, above a town that a century ago heralded the future. Only that future never arrived; and today, only ruins remain. This should be remembered as one of the great cautionary tales of 20th-century management, and yet few have ever heard of it. This is Fordlandia.

  Fitzcarraldo Fordism

  Henry Ford was many things, but today he is chiefly remembered as the father of modern industrial manufacturing. The Model-T, and the assembly lines that built it, created the template for the mass production of consumer goods. It also heralded the first great wave of scientific management, through which leadership became a game of standardisation, systematisation, and relentless efficiency.

  Less well-known is the story of Ford’s ill-fated attempt to build a utopia of control in the heart of the Amazon. In the 1920s, frustrated by his firm’s dependence upon the British-dominated rubber market, Ford bought 2.5 million acres of jungle from the Brazilian government, upon which he began the construction of a perfectly planned industrial town. Rubber plantations, warehouses, housing for workers, schools, and hospitals, and even a golf course – all arranged for maximum efficiency and production. With the promise of high wages, locals signed up to live and work there; and as the merchant ships arrived (bearing the water tower, alongside everything else) construction began.

  What looked perfect on paper, back in Detroit, soon unravelled in the face of local realities. Ford’s managers, who looked at the environment through the same eyes with which they designed car factories, planted rubber trees in tight ordered plantations – which made them horribly vulnerable to disease and pests. Malaria and yellow fever began to take their toll on the workforce, who naturally resented being made to work through the midday heat (when the trees were also least productive) by foreigners with no interest in more effective traditional methods. Management even imposed Ford’s strict personal morality – banning alcohol, tobacco, and even football inside workers’ prefab American houses.

  Finally, the local Brazilians had had enough. The cafeteria – which served up an alien cuisine of hamburgers and imported American canned food, of course – became the scene of a revolt by the locals, and Ford’s middlemen were forced to flee into the jungle. The army was called in and repression was restored, but the damage was done. By 1934 the project was abandoned and finally sold back to the local government at a huge loss. Fordlandia had failed, as it was always going to.

  Burning out and burning up

  This misadventure in western management has been on my mind ever since I spoke to Professor Dan Cable for an episode of Conversations on Climate. Dan is funny and honest – a great combination in a guest – and also happens to be a world expert in the subject of motivation and purpose. His book Alive at Work is a cracking read, and I really recommend it to anyone who wants to help get the best out of their colleagues.

  During our conversation, I asked Dan what he saw as the link between the way we manage people and the way we manage the planet, in light of the problems he identifies with traditional leadership.

  The first thing he said: ‘It’s about burnout.’

  The second: is that Henry Ford was ‘kind of a jerk.’

  ‘That system of industrial management – where we invented management, in a way – started with the assumption that people are expendable,’ Dan explained. In other words, people (or human resources) are commodifiable, standardisable units of production. That is the logic of the assembly line, and it works by applying ever tighter control from the top by motivating the fear centres of the human brain.

  This Fordist model, Dan explained, had its uses. But today it has simply gone too far. ‘Along the way we hijacked a system, and allowed the metrics of the system to create its own logic. We allowed ourselves to become slaves to it.’ The result is a world of burned-out employees, ground down in the pursuit of ever more efficient profit-making systems.

  When we think about sustainability, we must include the human element. If people feel more alive at work – if they are less stressed, able to be their individual selves, and follow their ‘seeking systems’ to innovate and find creative solutions to the problems we face – then they are much more likely to look after the planet too.

  Two rivers, one source

  Dan’s right about that, but I also think he’s hit on something deeper still – and the story of Fordlandia illustrates it perfectly. The same ideas that have created the modern epidemic of burnout are also partly responsible for our burning planet.

  • This system treats humans and the natural world alike as commodities, in which each is the same as any other. A worker is a worker; a forest is a forest.
  • The truth is found in abstract quantification of people and places from a distance, rather than in embedded knowing of their individual natures.
  • This system looks upon the labour force, and the land, only as a source of endlessly exploitable resources, logically organised for maximum extraction.
  • Once the productive capacity of that place or person is exhausted, it is discarded without any sense of responsibility for its future condition. All are expendable.
  • Standardised patterns of control that have worked in one location should be copied and repeated everywhere, regardless of local conditions. It is a colonial mindset.
  • If an output can be attained once, it can be attained always. Any sign of strain or slowing in the system means that something is no longer working hard enough, and should be met with a renewal of ever-tighter top-down control.

  This worked for a time. In the early 20th century technological change was slower, there was more slack in the system, labour was more organised and the natural world still had buffers and sinks to absorb the strain. Today, we are long past the point at which it is sustainable, on a human or planetary level. Mental health epidemics, strikes, low labour force participation, mass extinction, zoonotic epidemics, and climate chaos are the result.

  Rescuing ourselves from Fordlandia

  Fortunately, we have plenty of other models for creating healthy relationships with each other and with the planet, and brilliant people like Professor Dan Cable are working hard to get these new ways of thinking out into the collective conversation. Creating management systems that look to help people and places flourish according to their individual strengths – rather than enforce standardisation – is one part of it. Bringing decision-making to more local levels is another, as this is the scale where people have the greatest stake in maintaining healthy communities and environments for the long run. Dan is also a big believer in the power of creativity and motivating people according through natural curiosity rather than fear.

  There is probably a place for the old model of industrial management to help face the climate crisis. For example, we know of some technologies (such as solar panels) that we are going to want to produce in huge numbers, as quickly and cheaply as possible. The lessons of Fordism may serve us well in this phase of the decarbonisation journey. That said, the reality is that facing climate change largely means doing things differently, rather than squeezing out ever more of the same.

  We must also recognise that we can’t separate how we manage people and how we manage nature. Trying to combat climate change by working people into the ground will eventually fail, as firms break down under the weight. Fearful people can’t invent a hopeful future. Conversely, we can’t fix burnout without dealing with climate change – because a lot of the disillusionment in modern workforces is subconsciously related to an awareness that much of modern work is purposeless at best, and downright destructive at worst. And without healthy food, air, and space, the conditions for healthy labour don’t exist anyway.

  At heart, the twin problems of burnout and burnup are consequences of disconnection. It won’t surprise you to hear that Henry Ford never once visited his tropical utopia. Today’s challenge, on the other hand, is to bring economy and ecology back into true relation – with workers as whole people, and places as complex ecosystems, each known to the other in the fullness of their individuality.

  To watch all of the episodes in the series go to the Conversations on Climate YouTube channel.

   

  Written by Chris Caldwell CEO of United Renewables, originally published on Linkedin on December 13 2022.

   

  If you liked this article you may like:

  Big Oil in transition: Four strategies for a dying industry, Part II

  Big Oil in transition: Four strategies for a dying industry, Part I

  How Decision Making and Judgement affect Climate Change

• Hydrogen – a cool gas or just a lot of hot air?

  1:14 pm Comments Off on Hydrogen – a cool gas or just a lot of hot air?

  Ok, so I’m not an engineer or a chemist but I know plenty of both who are very excited about Hydrogen, however channeling my inner economist I’m not sure the so called ‘H2 Revolution’ will come close to living up to all the hype.

  Inefficient, expensive to compress and move, H2’s relatively low energy density means it needs x3 the fleet of ships/trucks to move it around when compared to liquid hydrocarbons. When you include other inefficiencies it is closer to x4. Another way to look at it is with the Michael Liebreich MA MBA OLY HonFEI’s cake analogy, if the cake is more expensive than its ingredients you don’t bake the cake, you buy it. Electricity is used to “bake” hydrogen (or generated through electrolysis, compress, storage, transport etc) with a process that means hydrogen will always be more expensive than the electricity used for making it. So why all the fuss?

  As with most things, it helps to understand who is behind the hydrogen narrative and what motivates them. With a little digging it becomes pretty clear where the value sits and what is best avoided.

  First up are the developers, speaking as one myself, I can say with confidence that there is no down side to shouting from the rooftops that H2 is the next big thing. Even when the economics don’t make sense, if hype drives demand, development fees are there to be earned. We always co-invest and would never enter into a project without believing in the long term benefits but there are plenty who run ‘development as a service’ models with big upside and limited downsides to putting H2 projects together.

  Next are the fossil fuel companies. These guys can make a big PR story with relatively little cash up front and can expect major support from governments (PM Sunak in the UK and President Biden in the USA have both recently announced support for H2). The problem is, the supporters believe they are getting Green H2 (from renewables) but instead are receiving Blue H2 (from natural gas with Carbon Capture and Storage ‘CCS’) often without a real understanding of the difference.

  The O&G industry claims that blue H2 can be produced at scale to offer ‘lower carbon’ alternatives to traditional fossil fuels. However even the Gas majors acknowledge that blue hydrogen would result in substantial GHG emissions from upstream methane leakage and flaring and the fact that CCS tech cannot capture all of the CO2 from the H2 production process. Regardless, if they can promote the belief in Blue H2 this allows them to keep doing what they are doing saying ‘don’t worry we will capture the CO2’, fantasy land but business as usual is comfortable for a lot of people.

  Same story for the owners of gas fields, sing the benefits of Blue H2 from the roof tops and maybe you get to survive for a little longer. Better than Gray of course so may be able to play a short term role to bridge to green for certain processes (more on this below). However given investment horizons of blue H2 CCS assets we need to take care we aren’t locking in inefficient and damaging emissions into the system for decades to come.

  Taking a step back for a moment, governments of all shades have been backing the hydrogen economy for multiple reasons. If they own fossil assets they fall into the above category of it suiting the narrative of allowing business as usual. If they don’t, they can ride the hype wave by seeming to be aligned with the new cool thing. Either way, it looks like they are doing something. Mostly talk right now (save for the IRA in the US) but high profile voices are speaking up after being cynically driven on by the fossil fuel lobby. The real danger here is that serious amounts of tax payer money goes down this path and that impactful renewables and efficiency efforts are diverted.

  Then there are the manufacturers of electrolysers and gas processing kit. It goes without say these guys want to big up H2 and build order books. The problem will come when intelligent capital is needed for projects to come to fruition! A little different for EPCs who put projects together for a fee, so while it makes sense for them to talk up H2 they have little to lose and much to gain.

  This all adds up to a minefield for investors. So is it all to be avoided? Not at all. There are diamonds amidst the mud.

  Genuinely green H2 in the right circumstances with the right supports make sense. Replacement of Grey H2 for industrial processed (used in refineries, fertilizers and methanol for eg.) with Green H2 is essential. The EU is at the front line of this push. Monies from the Innovation Fund are being pushed towards supporting the switch of existing gray H2 from natural gas to green H2 from renewables using a Carbon specific CfD. This is the one genuinely interesting area of the H2 space.

  Using H2 for anything other than replacement is at best a generation of innovation and renewables building away. There is value but it is far narrower than hype might suggest.

  Written by Chris Caldwell CEO of United Renewables, originally published on Linkedin on December 6th 2022

   

  If you liked this article you may like:

  Want to make money in renewable energy? It’s all about respect!

  The selfish case for climate reparations

  Are Renewables Firms are Ignoring Government Relations?

  How Decision Making and Judgement affect Climate Change

  Our sustainable future will be no-size-fits-all

• The wobbly stool of ESG: what does governance have to do with climate change anyway?

  12:01 pm Comments Off on The wobbly stool of ESG: what does governance have to do with climate change anyway?

  Environmental, Social, and Governance issues are interconnected – but are still not treated equally. That needs to change.

  As 2022 comes to a close, we begin to see headlines announcing the ‘word of the year’. I must confess that ‘splooting’ is new to me – clearly, I’ve been lying face-down on the floor wrong all these years – but in the business world, I’m going to offer an early contender for corporate word of the century: ESG. This word has had a meteoric rise in recent years, and now commands global debate and trillions of investment dollars. ESG has done much good; but splitting out the nest of issues that threaten our world into three separate letters is not without its problems.

  ‘They’re fundamentally interdependent, the environmental, social and governance [factors],’ argued Tara Schmidt on our latest episode of Conversations on Climate. As Head of Sustainability and ESG Finance at Lloyds Bank, Tara has cause to have given this more thought that most. In her view, it’s a mistake to try and separate these issues out from one another in the belief that we can tackle them – on invest in them – independently. ‘Climate isn’t just about the environment. Climate change is also about society.’

  As an example, Tara pointed out that the choices we make around decarbonisation will unavoidably have an impact on social equity. Who will bear the costs of the energy transition? Where will new green industries be sited, and what effects will that have on regional inequality? How shall we treat the phasing-out of ageing assets, when the most inefficient cars, homes, and even local economies are often those used by the poorest? Arguments that our society can’t afford to invest in clean technologies in the face of an energy supply crunch are easy enough to counter, and often made in bad faith anyway. But we must beware the costs of taking a ‘green leviathan’ approach to net-zero, without regard for the human impact along the way.

  We can’t focus only on climate in isolation; and by the same token, we must recognise that all policy is ultimately environmental policy, and all business activity is ultimately environmental activity. How we design our transport networks, grow our food, build our homes, trade and educate and govern and care for each other…all these things involve relationships with the natural world, with land and energy and with transformational material processes. The first principle of ecology is interconnectedness, and ESG itself is no different.

  First among equals?

  Interconnectedness is easy enough to understand conceptually, but our current paradigm for operationalising ESG throws up immediate challenges – foremost of which is the problem of measurement. An entire industry has sprung up to track carbon emissions, which has (unfortunately) become the near-exclusive measure of Environmental progress. But the Social and Governance elements are much harder to quantify: the former because it is such a diffuse and diverse set of concerns; the latter because it feels more nebulous and normative by definition. Just which measure of social benefit should we prioritise – incomes, inequality, equity, opportunity, health, education, autonomy, gender, race, geography…? And what does ‘good’ governance look like anyway?

  The risk here is that the environment – carbon in particular – gobbles up all the focus within ESG because it is easier to account for, and ESG ends up as a very wobbly three-legged stool. Governance in particular is treated as a poor relation. Yet even on its own terms, this bias is self-defeating. The current COP27 negotiations (ongoing as I write this) throw up a great example of how overlooking governance undermines efforts to solve climate change.

  Work from Global Witness has revealed that 636 fossil fuels lobbyists were accredited for the talks, an increase of 25% over the previous year. This makes the fossil fuel lobby the single largest delegation with the exception of the UAE. In fact, these lobbyists outnumber all national delegates from the ten countries most impacted by climate change, even as activists and indigenous representatives from the global south have been shut out by high costs, visa struggles, and repressive surveillance technologies. Meanwhile, the companies who are gaining access – Chevron, Shell, BP, and the other majors – are the same ones who are agitating for more fossil fuel exploration, and who have spent over $1bn since the Paris agreement on misleading climate lobbying and branding.

  This is possible because 29 governments have incorporated fossil lobbyists within their national delegations, including many African countries. Why? Because developing countries are no more immune to the influence of money in politics than anyone else. It is ironic that COP27 is hung on the fact that the governments of the Global North refuse to properly fund climate efforts in the global south; whilst oil and gas companies (also from the Global North) are happy to rush into the gap, offering billions in FDI in exchange for oil and gas concessions.

  Land allocated to fossil fuel extraction in Africa is set to quadruple; 30% of it overlaps dense tropical rainforests of which 90% are in the Congo basin, one of the few remaining global reservoirs of biodiversity and home to 150 distinct ethnic groups. Yet the DRC, Republic of Congo, Rwanda, and other nations of the basin are amongst those with fossil fuel executives in their COP delegations. And it doesn’t take a great deal of time digging into the history of western oil companies’ behaviours in sub-Saharan Africato know that the risks extend far beyond any carbon count.

  This is a monumental failure of governance, not least from within these fossil fuel firms themselves. And it will have real impacts, both environmentally and socially. Yes, governance may be a trickier measure, and it resists simple box-ticking compliance. But it is no less important for that.

  Connecting the dots

  Meaningfully connecting ESG factors is an example of higher-hanging fruit. It will be more challenging, but also more rewarding. For hints on the way forward, I turned again to my discussion with Tara.

  Firstly, she is absolutely correct in highlighting the benefit of thinking more locally. Whenever power is exercised closer to home, mutually-reinforcing ESG connections become far more obvious because feedback loops are better at transmitting information.

  Local people know best the impacts of economic activity on their own environment; are more sensitive to social effects, which are also more visible at smaller scales; they do not have to struggle to overcome complexity and distance when evaluating and altering decision-making.

  If we can work to organise economic activity at a more appropriate scale – and regional development teams for business lending was an example Tara gave from her own work – then the elements of ESG will naturally become more integrated.

  Secondly, whilst the frameworks she mentioned are important, I think we need to be careful not to become beholden to measurement as the only ground upon which to take action. Gathering data is most valuable when we have an uncertain picture of the reality around us. Today, however, we do not lack for information about the challenges we face – climate, inequality, and corruption are all exhaustively mapped. And just because some of these issues are more resistant to scientific measurement than others, that does not mean that we don’t know what to do about them.

  None of the great 20th-century movements for justice – from suffrage to apartheid – waited around for us to develop more precise ways to quantify the problem. Nor did they hold up transparency and disclosure as adequate proxies for change. Instead, they were led by people who took real action when faced with the obvious.

  So it should be with ESG today. We don’t need ever more decimal points before we decide to do what needs to be done, on even the hardest to measure elements. Instead, if we act with integrity to solve one kind of problem wherever we find it, we shall discover we are also working to heal the whole.

  Written by Chris Caldwell CEO of United Renewables, originally published on Linkedin on December 1st 2022

   

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• COP 27 in review – the last gasps of a dying process?

  11:53 am Comments Off on COP 27 in review – the last gasps of a dying process?
  Long-awaited success on loss-and-damage cannot distract us from the reality of a system which is no longer fit for purpose

  Another year, another COP. As the banners come down, the private jets take off for home, and the final headlines fade from the front pages, what are we to make of COP 27?

  This year, more than ever before, I know exactly what I think. After two deadlocked weeks, two fraught overtime days, forty thousand participants and endless screeds of analysis, I have somehow broken through to a refreshingly simple conclusion.

  We can’t go on like this.

  COP 27 has demonstrated that the system is no longer fit for purpose, and this year’s event must be the last of its kind. It has failed too many times, in the same old ways, and we cannot afford to humour the dysfunction any more. We are all out of time.

  Either next year’s process is conducted in a radically different manner, or the whole structure should be replaced for good.

  Loss and Damage wins through

  Before we read the full obituary of a dying process, let’s pay due respect to a genuine achievement – the creation of a dedicated climate damage fund. Reparations is a subject that had been ignored by the global north for far too long, and it is some measure of justice that an agreement was finally struck this year. It’s also good news that the model demanded by developing nations is the one that stuck, rather than the US preference for a ‘mosaic’ of existing facilities (none of which have done the job so far).

  We now have our dedicated money-pot labelled ‘loss and damage’; but the jar itself remains empty. Big promises have been made on climate funding before, only for the cash itself never to arrive. The Green Climate Fund – which was set up in 2009 with the promise of $100bn a year for developing nations by 2020, of which only about $2bn has ever been spent – springs to mind. Will it be different this time? This will all hang on delivery, and I’m not celebrating yet.

  Talking and performing

  Even the success around loss and damage this year highlights the Achilles heel of the COP process – an obsession with talk and performance over implementation and action. COP 27 was supposed to be the ‘implementation COP’ – so perhaps it’s worth unpicking exactly how the negotiations themselves were executed.

  Forty thousand elites crammed into Sharm El-Sheik, a tightly-controlled pleasure resort buried deep in the desert, all protected from the inconvenience of meeting anyone actually affected by climate change courtesy of the Egyptian security apparatus. The event was sponsored by Coca-Cola, the biggest plastic polluter on the planet, and infiltrated in plain sight by over 630 fossil fuel lobbyists. The first few days were the usual revolving photo-shoot of world leaders jetting in to be seen by the right people, even as scientists, civil society groups, and indigenous representatives were largely priced – and policed – out of the process entirely. Some observers have called this the most surveilled COP in history. Others called it the ‘worst COP ever’.

  Meanwhile, the negotiators themselves got down to the task at hand: talking about how they were failing to get anything done. I say this not to pass criticism upon the many well-intentioned and hard-working people giving the best years of their lives to the UNFCC process. My heart goes out to them. But another year of ‘heroic’ negotiating efforts leave me with a sense of adrenal fatigue. This year’s central achievement only came to fruition after the conference blew through its own Friday deadline, and submitted delegates to a forty-hour, last-ditch session over the weekend. In other words, they spent their allotted two weeks getting nowhere, then suddenly realising they had to act only once the deadline has passed…which sounds a lot like last year, and the year before that. The depressing parallel with the world’s decarbonisation deadlines themselves should not pass unnoticed.

  Form and (dys)function

  The whole process demonstrated, once again, that the implementation of COP itself is fundamentally dysfunctional. Putting so much weight on this one annual gala only makes climate commitments more of a momentary performance. Once complete, governments can drop their focus for the rest of the year, safe in the knowledge that the cameras have moved on.

  The format of the negotiations themselves – a continuous bickering over language – is an example of the kind of foot-dragging techniques that climate denialists now employ, and a few bad actors are more than happy to sabotage consensus to prevent meaningful action.

  Even the weight of COP’s own history now seems to be playing against it. Efforts by the EU to force China and other fast-growing economies to pay into the new damage fund met with angry resistance from the majority of developing nations, who saw it as another example of developed nation’s long efforts to divide the G77 as a negotiating tactic. They duly closed ranks instead. This kind of historic baggage only gets in the way of putting genuine pressure on the likes of China to reform its woefully inadequate emissions reduction targets.

  The measure that matters

  Perhaps I’m over-thinking it. After all, there is one measure above all that tells us the health of the world’s climate negotiation process – and 2022 saw carbon emissions reach record highs.

  After three decades of talking, COP 27 was not the herald of genuine action on climate change we needed it to be. We didn’t even see more ambitious promises on emissions, because well-intentioned negotiators barely defended what was agreed in 2015. Many countries put the weight of their delegations behind attempts to abandon 1.5 degrees. Emissions need to peak in 2025 to meet this target, yet that language was cut from the text, as well as language around phasing down fossil fuels. In the words of one Saudi Arabian delegate: “We should focus on emissions. We should not mention fossil fuels.” That is exactly the kind of doublethink that sums up the current state of climate governance – running down the clock with endless hair-splitting on language, even as emissions tick up year on year.

  COP 28, of course, is going to be hosted by another petrostate in the United Arab Emirates. It’s lead Climate Envoy, Sultan Ahmed Al Jaber, is also CEO of Abu Dhabi National Oil Company. I doubt that 27’s reign as ‘worst COP ever’ will last more than a year.

  Time for Change

  2015 gave us the Paris Agreement, which stands as the high-water mark of climate governance to this day. In truth, this is all the blueprint we really need. The time for endless renegotiations is over. The COP talking-shop should be replaced with a leaner, meaner operation with a relentless focus on execution. There is no reason this can’t run year-round, and be given the tools to broker effective action without being held ransom by intransigent minorities.

  We should have learnt by now, from any number of transnational bodies (UN, WHO, IMF etc.), what works and what doesn’t. Creating something new would at least redeem the COP process since 2015 at least as having been a necessary, and therefore useful, failure. Provided we act now, there need be no shame in that.
  

   

  Written by Chris Caldwell CEO of United Renewables, originally published on Linkedin on November 23rd 2022

   

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