Money Talks!

A dire warning has once again been sent out to the global community — climate change is real and the impacts are imminent. A recent scientific report issued by over a dozen federal agencies made headlines in major media outlets across the country. It concluded that we can expect climate change to forge a 10% decline in the nation’s GDP before the end of the century. That amounts to more than double the impact felt by the Great Recession!

 

Vital infrastructure in the South and East coasts are being destroyed by larger and more frequent hurricanes. Crop failures in the Midwest are on the rise due to unpredictable and unprecedented weather patterns. Wildfires in the West are claiming more acreage, and lives, than ever! The list of very plausible scenarios in the nearly 1,700 page report goes on to include virtually every corner of the nation. Make no mistake, by the end of the century we will ALL be victims of climate change in some shape or form.

 

As most of us can attest, it can still be difficult to make convincing arguments along environmental justice lines. When speaking with business leaders and politicians about taking action on climate change it is hard to justify new regulations or operational changes to protect the health of our ecosystems. But, making the connection between climate change and economic vitality can be a recipe for success.

 

It is articles like these that are fundamentally changing how dialogues in boardrooms and town halls are being framed. In light of the urgency of the matter, I can appreciate the approach of focusing on the problems. Stating the specific impacts and threats of climate change and how those will negatively impact our economy is a classic fear-based tactic that our society seems to be accustomed to hearing. It’s important to note however, many of us actually respond better to solutions and opportunities (i.e. hope), rather than panic and dismay (i.e. fear).

 

For the sake of conversation, I’d argue that presenting climate change solutions with economic benefits is proving to be the more effective motivational factor. Look no further than the rapid adoption of renewable energy technology, like solar photovoltaics. It’s a classic win-win-win scenario — save money, reduce fossil fuel emissions, and improve the energy infrastructure. While most decision makers will strictly look at the profitable aspects of such a solution, it undeniably benefits both people and planet in the process. Enter, the Triple Bottom Line!

 

While it’s a sign of progress that major media outlets are putting these types of reports on the front pages, their chosen form of messaging isn’t doing us much good.  Solutions and economic opportunities will drive the change we need to see. In order to do that we need to be having conversations along those lines. Take for example the early days of sustainability action…

 

It was the Green Teams and the lonely passionate employee who first realized that connecting financial savings with sustainability projects around the office were the opportunities worth pursuing. Things like starting up recycling programs to reduce waste management costs, or taking advantage of energy efficiency incentives and installing LED lights to reduce energy consumption were proven winners. It’s fairly simple to assess and implement these types of “low-hanging fruit” measures. Their relatively low investment scale, ease of integration, and simple payback calculations made it easy to gain approval.

 

Moving forward however, decisions will be made on a broader set of value propositions. Factors like risk management, regulatory drivers, employee retention, insurance rates, and corporate responsibility are just some of the parameters that we are seeing organizations starting to address. They still all relate back to financial performance and are directly correlated with the organizations triple bottom line performance. The greater degree of complexity associated with these measures is presenting new challenges to decision makers.

 

Take for example the decision being made by many corporations and governments to reduce carbon emissions by significant percentages (i.e. 80% by 2050). It’s certainly an important environmental commitment and something that most customers and residents strongly support. How do the economics of such a decision break down though? Does a change from oil to natural gas for heating fuel create financial savings? Perhaps! But, how about investing in an entirely new fleet of vehicles that have low/no emissions ratings? Where does one decision make financial sense and another not have a worthwhile payback? When you make a commitment to reducing carbon emissions, which tactics make the most sense for your organization as opposed to another organization in a different region or entirely alternate sector?

 

Going through stakeholder engagement exercises is often a valuable place to start in answering these questions. Both internally and externally. Part of the complexity of sustainability decisions is that there are often a vast degree of interconnectedness between one factor and another.  Gaining insights and understanding the perspectives of your stakeholders makes it easier to see which decisions will have the greatest overall benefit. In order to do successfully, organizations must take a step back from day-to-day operations and give reverence to this engagement process.

 

A sustainability advisor can help decision makers go through this process. Aligning corporate policies and practices with the principles of sustainability and interests of stakeholders requires a new kind of professional service. Hiring a sustainability advisor provides the value of constructive facilitation, qualitative and quantitative analysis, and implementation assistance specific to these types of long range plans.

 

Traverse creatively works with internal teams on a personal and professional level to unfold hidden opportunities and catalyze them into measurable performance activities. With meaningful interaction and customized deliverables, clients benefit from a cultural shift and master plan that will guide their organization toward sustainability. With leadership making these types of solution-based commitments, we can begin to resolve the greatest impacts of climate change.

 

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