IMD-OWPLIVE22-PostEvent-Report

→Sustainability

KEYNOTE

“YOUR PRIMARY RESPONSIBILITY IS TO ACT IN THE BEST LONG- TERM INTEREST OF ALL STAKEHOLDERS, NOT JUST SHAREHOLDERS.”

Leaders also need to think in terms of systems, she added. For instance, there is a great deal of focus on emissions reductions targets, but James urged business leaders to think holistically about their impact on people and planet. A ‘JUST ENERGY TRANSITION’ By way of example, the global executive with 30 years of experience in environmental and sustainability consulting underscored the risks of the green energy transition for developing economies. Responding to one of many questions from the audience on policy, stakeholders and the economic transition, she said these countries missed out on the fossil fuelled industrial revolution of the richer world. And although they have contributed little to the climate crisis, they will be among the worst affected by it. “Millions of people are getting left behind and that reinforces the importance of us thinking about a ‘just energy transition’,” said James, adding that rising energy costs may price out poorer countries, creating social issues. “There is a direct link between rising energy prices, rising food prices, and social unrest.”

Furthermore, in dealing with energy’s climate impact, she said leaders cannot ignore the effects of biodiversity loss, either. “Nature is an extortionary machine and her ability to absorb carbon is phenomenal,” she said, referring to the process of photosynthesis, a nature-based solution to global warming. REGENERATIVE AGRICULTURE: NET POSITIVE agriculture that can actually have a positive environmental impact by reversing climate change through rebuilding biodiversity. “It’s a bit like being not net zero, but net positive,” said James. “It changes what people think is possible.” She is also excited by the concept of regeneration, particularly regenerative

She went on to say that climate change is a double-edged sword, and urged participants to seize the opportunities as well as minimize the risks. “There is a lot of capital out there looking to be deployed. There’s no shortage of investment, but there’s a shortage of projects,” James said, noting that ESG disclosure and reporting requirements were mobilizing investment in green projects. ‘WE NEED EVERY SINGLE WEAPON IN OUR ARSENAL’ One area of innovation that James was especially excited about was hydrogen, because it has an exceptionally high heating volume, which means it can be used in heavy industry and transportation, including shipping. “I am very optimistic that we will start to see some real progress over the next five to 10 years,” she said. Carbon capture, reuse and storage is another area of interest. “We need every single weapon in our arsenal,” she said, an approach the Intergovernmental Panel on Climate Change (IPCC) has called for. “We cannot afford to just rely on one strategy to solve this problem, we’re going to need it all.”

FOCUS ON STAKEHOLDERS, NOT JUST SHAREHOLDERS

“The problems that we face are difficult, they require long-term thinking and therefore that requires courage. And this is very much about leadership,” James said, adding that leaders need the ability to make decisions that trade-off short-term benefit for a long term gain. “Your primary responsibility is to act in the best long-term interest of all stakeholders, not just shareholders,” she told delegates, underscoring not just the risk, but the business case for sustainability, in terms of access to talent, customers and capital. James said: “Companies need to think about ‘double materiality’ — what is my business’s impact on climate change but equally, what is the impact of climate change on my business, and will it be sustainable in the context of that change?”

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