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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. 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

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  1. Corporate Responsibility in a Collapsing World Cranfield School of Management Jonathon Porritt 29 October 2008

  2. 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

  3. JT Group

  4. PASSIONATE about Sustainable Development Not passionate about Corporate (Social) Responsibility, Quality of Life, Corporate Citizenship, CSR, Liveability etc etc

  5. The Global Economy: nothing more than A House of Cards built on A MOUNTAIN OF DEBT aided and abetted by Governments’ in Retreat

  6. From Masters of the Universe to “A bunch of spivs and speculators”

  7. 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.

  8. 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

  9. SOCIAL EXTERNALITIES ENVIRONMENTAL EXTERNALITIES GLOBAL ECONOMY

  10. 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”

  11. Capitalism today is the only economic show in town

  12. “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

  13. IPCC Consensus Staying below 2°C means stabilising at 450ppm CO2 which means c. 80% cut by 2050

  14. 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

  15. 450 350 550

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

  17. Get a realistic price on a tonne of CO2 just as fast as possible

  18. The Shrinking Earth

  19. Human Capital Social Capital Capital Natural Manufactured Capital Financial Capital Five Capitals Framework:“interdependent and indivisible”

  20. 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

  21. 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

  22. WEALTH WITHIN • ENVIRONMENTAL LIMITS • - NOT BEYOND! • DECARBONIZATION • DEMATERIALIZATION • CLOSED-LOOP SYSTEMS

  23. THE “LAWS” OF THE MARKET MUST YIELD TO THE LAWS OF THERMODYNAMICS

  24. Changes Ahead • Prices tell the truth • Governments reclaim their rightful role • The Corporate “Licence to Operate” is re-written

  25. “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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