Paul Hohnen Sustainability Strategies
Notable Quotables
“....what do we know about sustainable development and where might that knowledge and responsibility take us in the future? ... we know that we humans are dramatically altering the planet and its natural systems. ... we know that an increasing number of scientists see the risk of a now unstoppable unravelling of the planetary systems that have been more or less stable for the last ten thousand years.
In spite of all this knowledge, we know that the vast majority of people are doing little or nothing to change their behaviour. Whether as consumers, voters or investors, the level of societal and political change globally is, ironically, moving slower than the changes in the Earth's systems. ...But we also know that the human species is a resilient and adaptive one. We will respond. As witnessed by the decade around the second world war, we know that great crises trigger enormous and rapid political, economic, technology and social change, and huge sacrifice.
We don't know what the precise triggers will be this time, and we can only guess at the rates of change, but we know that we are facing The Great Adaptation. If there are any lessons from world war crisis management, it is that history will be on the side of those who have — and use — the best information, build the strongest strategic alliances, lead public opinion and make markets deliver the tools needed. For this, we need a new, more honest, decisive and joined-up politics. If democracy doesn't deliver this soon, its relatively short history might well be over.”
Extract, ‘Happy new year? What 2020 hindsight tells us’, Innovation Forum, 12 December 2019
“The case for innovation in business has never been more compelling. A rapidly changing market environment, characterised by fast-moving and, arguably, unprecedented developments on the political, social and environmental fronts, means that business needs to be more responsive than ever, at all levels.
Short-to-medium term issues such as Brexit — as future relationships emerge (or not!) — will of course require business in the UK and the EU to be fleet of foot. Even longer term structural issues, such as how capitalism can be transformed to work for, rather than against, sustainable development, will require a new level of long-term focus and commitment by business leaders.
The advent of student climate strikes, "extinction rebellions" and political calls for a green new deal need to be matched at the boardroom level. To this can be added the fresh urgency given by the latest IPCC reports — signalling the need for even faster and deeper emissions reductions than the Paris agreement if catastrophic climate change is to be avoided.
...
Effective sustainable innovation systems need be neither complex nor expensive. While there is no such thing as "future-proofing" an organisation, by following a few simple strategies, you might come about as close as you can to being a nimble, adaptive and successful company meeting investors' and society's needs.”
Extract, 'Is sustainability innovation the route to saving capitalism?', Innovation Forum, Paul Hohnen, 3 October 2019
“Many of us have, for some time, been advocating for large scale infrastructure projects across Europe to fast-track sustainability in the energy and water sectors, while creating jobs and growing the economy. But I share the deep concerns of those who see three main obstacles to the successful uptake of a GND, whether in Europe or elsewhere. ... If there's one lesson from the Brexit history to date, it's that the business sector needs to go on the front foot more effectively in championing the positive policy solutions to looming political, social and environmental own goals. As Michel Barnier put it: "The best time to launch a Green EU Deal was years ago. The next-best time is now." ”
Extract, 'Europe must focus on a Green New Deal (not Brexit)', Innovation Forum, Paul Hohnen, 2 May 2019
“The importance of knowing how chemicals are made, used and disposed of — and how best to manage them — is the subject of a landmark UN Environment synthesis report recently released in Nairobi. The new Global Chemicals Outlook report will have — and deserves — a wide readership in governmental, industry and NGO circles.The report's core message is simple. As the acting executive director of UN Environment, Joyce Msuya, succinctly puts it: "We cannot live without chemicals. Nor can we live with the consequences of their bad management." ... the UN's Agenda 2030 and the Sustainable Development Goals (SDGs) won't be achieved without chemicals, but neither will they be achieved with a 'business as usual' approach that doesn't address the stark reality of chemical pollution. A new approach is urgently needed that addresses all sectors and stakeholders ... such a new approach is now in prospect. Intergovernmental discussions — which involve multi-stakeholder representatives — are underway on a possible new comprehensive framework for the sound management of chemicals and waste beyond 2020.”
Extract, 'Why chemicals management is essential for a safer, healthier world', Innovation Forum, Paul Hohnen, 14 March 2019
“The term Green New Deal has come back onto the political radar. In 2019, whether you're an entrepreneur, investor, consumer or voter, you need to understand why the concept is back. And, perhaps, why you should also get behind it. ... few if any political parties have convincing (or indeed, any) policies that address the main issues of our time in a clear, comprehensive and compelling manner. These are basically: Economic: Growing public awareness and anger at the widening rich/poor divide, compounded by stagnant or falling real wages, and high levels of youth unemployment. Unaffordable housing and health care can be added to this mix. Societal/identity: Questions remain unanswered about immigration/refugee issues and integration, and their implication for social cohesion, national values and the economy. The debate has stalled between the "country is full" and the "open borders" schools of thought. Environmental: With the evidence of climate change now everywhere and the growing costs of air pollution from fossil fuels clear, public concerns are mounting. With the most recent IPCC report speaking of a 12-year time frame to radically cut greenhouse gas emissions to save civilisation as we know it, the whiff of panic is now in the air. In this context, business-as-usual — if that was ever a smart option — is no longer sustainable. Policies to stimulate massive investments in innovation, technology, infrastructure and new business models are now needed to address these issues. ... Business has a last chance opportunity to take a progressive position in this debate, doing good for its shareholders, customers, staff and communities. Future proofing business starts by making sure there is one.”
Extract, 'Could an innovative Green New Deal kick start 2019?', Innovation Forum, Paul Hohnen, 10 January 2019
“Unless credible response measures are put in place, the Global Climate Crisis seems set to undermine investor, business and consumer confidence on an unprecedented scale, as well as further erode trust in governments.
This is in no-one's interest. As Stephen Green, former chair of HSBC once remarked, climate change will be the ultimate test of how well capitalism works. Now's the time for all business to help drive the needed and urgent transition to a vibrant, low/no carbon economy.”
'Why business must make climate its business now', Innovation Forum, Paul Hohnen, 19 October 2018
“On the economic front, the importance of the (chemicals) sector is hard to deny. The sector is worth over $4.5tn worldwide, with most recent growth in east Asia. For new growth, however, the OECD countries (and China) need now to explore new products, services and management systems. On the social and environmental fronts, the picture is less rosy and has "needs to change" written large all over it. ... Since start-ups represent a major source of new business ideas, it would serve business interests well if all companies with an interest in better performing, lower cost and less toxic materials and products took a more active interest in driving the sustainable chemistry agenda, working with universities, regulators and start-ups.”
'A Winning Formula for Sustainable Chemistry Start-ups', Innovation Forum, Paul Hohnen, 18 October 2017
“The hard realities of climate change are showing again across Europe, with the historic drought in Italy ... being only the latest example. What seems increasingly clear is that Europe ... needs to invest massively in climate abatement and adaptation infrastructure. ... a grand European project to become collectively more resilient to energy and water stress could be just what is needed now to give Europe the new and positive shared narrative so urgently needed. Not to mention the jobs, economic growth and technological innovation involved.”
Letter, Financial Times, 2 August 2017
“Chemicals will be essential to the achievement of the 2030 Agenda and the majority of its sustainable development goals. The SDGs, however, will not be reached unless we have both a new and improved framework for the sound management of chemicals and waste and parallel work to mainstream sustainable chemistry. In this latter respect, the German initiative for an International Sustainable Chemistry Collaborative Centre (ISC3) is a promising development.”
Extract from 'The pressing need for global chemicals governance', Innovation Forum, 7 February 2017
“Business, and markets in particular, need to understand that the Paris agreement is not just another aspirational, but essentially meaningless, global road map. The agreement, between nearly 200 countries (almost all of whom underlined in their speeches the very real dangers of continued warming to the future of their societies, landscapes and economies) amounts — in security terms — to a global ‘code red’. It needs to be understood and acted on as such. No other threat on the radar stands to affect so many, so much, and for so long.”
Letter, Financial Times, 16 December 2015
“As the Paris COP 21 UN climate summit approaches, expect to hear more and more CEOs coming out in favour of a price on carbon. The trend has been long in coming and is — with some caveats — to be welcomed. It was given additional impetus in June 2014 when a thousand firms signed a "putting a price on carbon" statement developed under a World Bank initiative. Several months later, at the UN secretary-general's climate summit, leading companies (including Acciona, Braskem, EDF, Nestle, Novozymes and Philips) supported a "carbon pricing champions" initiative. This included a commitment to set an internal carbon price and publicly advocate the importance of carbon pricing. ..
If the call for a carbon price is not to be seen as a new wave of sophisticated PR posturing — and sometimes covering behind the scenes support for efforts to undermine either a global agreement or national legislation to increase the cost of fossil fuels — CEOs need to be more specific on how and where they would like to see such a price introduced. They also need to start putting out some figures on what the right price might be, and how that should be assessed. What are the appropriate criteria? Carbon intensity per barrel of oil equivalent, where coal would fare badly? Or relative radiative forcing potential — and hence impact on the greenhouse effect — where natural gas might not look so attractive? Crucially, if they are serious, CEOs will also need to enter — and lead — domestic political debates on carbon pricing.
There are no easy answers to these questions, but CEOs are smart and practical people. They are to be encouraged to lead this conversation and to help co-design a working system of carbon pricing. And the (too many) CEOs still silent on the issue should be encouraged to be part of the solution.”
'Companies warm to carbon pricing', Innovation Forum, 30 April 2015
“Your editorial "Warm feelings are no help to the climate" ... leaves one with the sense that the FT is trying to have its cake and eat it too. Either climate change carries the risk (as you note) of "catastrophe" or it does not. Your weighing up of the "enormous benefits" and "great risks" of the continued use of fossil fuels would be more persuasive if at least two of your policy prescriptions were not deeply flawed. Yes, carbon capture is technologically possible but no one is seriously investing in it (as, by contrast, they are in renewable energy) precisely because it is uneconomic and uncompetitive for most applications. Yes, a "price on greenhouse gas emissions" is an excellent idea, but how, where and when do you see the being agreed? (When CEOs)... defend similar calls for a global price on carbon at national elections (and not just around climate conferences), perhaps this one day may become a political possibility. Until then, climate campaigners have little option but to turn up the heat in their own way.”
Letter, Financial Times, 25 March 2015
“There is a need for some tough talk in this week's climate talks in Lima on the subject of climate finance ... The first point ...is the unlikelihood of persuading the OECD group to make the magnitude of pledges sought by the emerging economies (let alone needed, as Oxfam points out) to adapt to climate change. Current levels of public debt, unemployment and domestic authority policies will put paid to that. The second is that the "invest in climate adaptation" narrative is itself deeply flawed. Odds are that as climate events become more extreme and regular, governments will be forced to increase invest in local climate-resilent infrastructure. Moreover, depending on the speed and scale of change economies everywhere could be scrambling to adapt to the rising costs of climate-related change. This means the very real prospect of less funding - and political support - for international action on the part of all countries as time goers by. ... the only alternative to going down an increasingly nationalistic and ineffective climate finance route is to ... put climate change back at the top of the international agenda as an existential strategic priority ... (and) ... massively expand investment-attractive policies that will generate the green power, green growth and green jobs desparately needed in all countries. Together, these steps stand a greater chance of mobilising more capital, and more action, than any climate fund.”
'Climate finance must top the international agenda', Letter, Financial Times 3 December 2014
“(According to the 2014 World Investment Forum) ... there is an estimated gap of around $2.5tn annually between what developing countries receive now and what they would need to make the transition to sustainable development. To achieve increased global investment of this magnitude, a step change is necessary in the levels of both public and private finance. In discussions, governmental and private sector participants seemed to agree on a number of points. First, that to unlock the capital needed, a major policy and regulatory re-set is required on all sides. Second, public finance alone is insufficient; massively expanded private financial flows (at least double the current growth rate) would be vital. Third, the private sector was already active in experimenting with sustainable investments. These had potential to be taken to scale. ... Judging from the conversations at the WIF, the bad news is that we're still heading, rapidly, in the wrong direction. The good news is that there are more finance and investment experts than ever willing to help in crafting a turn-around.”
'$2.5tn shortfall for sustainable development in developing countries', Guardian Sustainable Business, 27 October 2014
“Along with the internet, conferences and business events are one of the best, or worst, ways invented by humankind of spending time and money. ... employers need to build internal capacity to organise and moderate meetings. (This should include young women. There is a need for greater gender balance and for younger professionals in moderator/events management positions.) This encourages understanding of what is important for their employer to know, who the key stakeholders are and how best to communicate with them.”
'Employers -promote gender balance along with meeting skills', Financial Times letter, 8 October 2014
“There's a sense of "right diagnosis, wrong prescription" in Donald Tusk's call on Europe to move towards greater energy independence ... The Polish Prime Ministers to be applauded for reminding us that Europe is at its best when it faces challenges collectively and that a closer energy union is long overdue. However, in the face of all the evidence on climate change his counsel of making "full use of the fossil fuels available" is at odds with his desire for "a cleaner planet". Even more strangely, European leadership on energy efficiency and renewable energy technologies bare rates a mention ... If a true and sustainable energy union is to be forged, surely it should be built on ...locally available, low or no carbon energy sources, especially those whose future operating costs look low.”
'Deep flaws in your climate policy prescriptions', Financial Times letter, 28 April 2014
“So what should CEOs at the (2013) Global Compact Leaders Summit make of this complex landscape of conflicting pressures and expectations? Three steps are now essential. The first is to finally accept that sustainable development is indeed the new operating framework for business. It's not going to go away and will only become more urgent. In many ways, global change is already with us. Secondly, CEOs need now to be explicit about this. They should demand that all governments, all political parties — as much as all companies — must have the sustainability policies needed to win over consumers, investors and voters, or explain why they don't.Thirdly, they must actively engage in the design of the needed global institutional and policy architecture. This also means advocating smart regulation (e.g. on mandatory sustainability reporting) and economic policies (e.g. that tax pollution and not labour).”
'Sustainable development: business has a long way to go', Guardian Sustainable Business, 13 Sept 2013
“(Regarding the use of the terms 'green' and environmentalist') 'This narrative is consistent with the prevailing use ... by many in government and the private sector as a pejorative term, usually synonymous with "anti-development" and "anti-business". ... however, climate change is now central to the viability of nation states and the economic and political systems that support them. Rather than being fringe, the issues of climate stability and health of global ecosystems are increasingly defining the contours of national policy and geo-strategic relationships. They are, and will continue to be, domestic and foreign policy issues of the first order. ... Indeed (many see) ... the issues of resource scarcity and increasing climate variability as drivers of a new resource efficient business model, and the ultimate test of the ability of capitalism to keep delivering the goods."”
'Kerry is up to the climate challenge', Financial Times letter, 12 May 2013
“Let us be clear. All the scientific evidence points to the fact we are crossing — or might have already crossed — planetary system boundaries. These include changes to atmospheric chemistry (with resulting changes in climate and ozone depletion), to the nitrogen and phosphorus cycles (affecting river and marine ecosystems), to biodiversity loss and profound changes in land use. We need to understand that these are not irrelevant or remote developments that might only affect, say, one kind of insect in a rainforest somewhere. These are changes that will sooner or later affect every species on Earth. It is essential to keep in mind that our current political, social and economic systems — and any hope of sustainability — are built on a healthy and self-replenishing ecosystem. The sooner our political and business models incorporate this reality, the sooner we can put ourselves on a sustainable path.
Here's the great irony of our current situation. If we fail to choose to make orderly and strategic changes to prevent the profound system changes that are in the pipeline, these changes will take place. We will then be forced to respond in a probably disorderly and non-strategic manner, where the social, political and economic costs will be significantly higher.”
'Reasons to be both hugely disappointed and very excited', UNIDO 'Making It' magazine, 27 August 2012
“... as I argue in a new Chatham House paper on the future of sustainability reporting, ... (t) he first generation of sustainability reporting — SR 1.0 as the paper calls it — has proven both the feasibility and value of reporting on a company's economic, environmental and social (or sustainability) performance. (however) SR 1.0 cannot continue in its present form. A next generation model - SR 2.0 - needs to be developed that will address the weaknesses that have been identified with the current approaches. These problems include: (o)nly a small percentage of the world's multinational companies are reporting on their sustainability policies, practices and impacts. If governments really want to harness the power of the private sector, and track progress, then universal reporting — at least by all large companies — is required.”
'Sustainability reporting: immediate choices for the future', Guardian Sustainable Business, 20 January 2012
“ While it is impossible for a single conference to do everything, next year's Rio+20 conference will make a historic contribution to sustainable development if it calls for policies, practices and frameworks that encourage:
The worst thing that could happen now is that we let short-term financial challenges and interests tempt us into repeating the mistakes of a dying economic model. ”
'Why the private sector is holding back on sustainability', Guardian Sustainable Business, 26 Sept 2011
“If climate change is going to be anywhere near as globally destabilising and disruptive as scientists think it will be, isn't this the next big security issue? And if it is, why aren't we treating climate change as the war it is, and mobilising all our resources to minimise the impacts? ... (We must reject) the nonsense of the dominant policy approach which maintains that climate change should only be tackled only by the use of market forces. While I understand the importance that economics played in the defeat of Hitler's Germany and Tojo's Japan, the Allies did not win those ones by a mix of light-handed regulatory and voluntary market mechanisms. Should our forebears have let the markets handle Hitler? No of course they shouldn't have.”
'Should our forebears have left it to the market to handle Hitler?', Guardian Sustainable Business, 28 June 2011
“By going green, a company achieves several things at the same time. First, it reduces the time wasted on brand management "fire fighting". Think of all the time and money lost when some accident or incident attracts negative media coverage. In a world increasingly worried about the impacts of climate change, air pollution and environmental damage, companies with poor performance can expect to spend more time defending themselves to regulators, investors and the media. Consider Exxon, which is still dealing with the consequences of the Exxon Valdez oil spill. Second, smarter use of raw materials and energy, and producing less waste, can lead to quick improvements at the bottom line. The motto "make more by using less" has been adopted successfully by big chemical companies like BASF, Bayer and Dow.Third is the market share. For many specialists, "green industry" is seen as the next IT revolution in terms of market growth and opportunities. Some assessments show that the global market for green products and services is more than 500 billion euros a year and growing. Many of the world's biggest companies, like Siemens, Philips and GE, are busy positioning themselves for the "green industrial revolution".”
'Why Green is being smart', The Star newspaper, 2010
“Climate "policy as usual" is not working. In the 20 years since serious global discussions on climate change have been underway, atmospheric greenhouse-gas concentrations and average temperatures have continued to rise. During the 1990s, the talk was mostly about the need to prevent climate change. Now, adapting to climate change is given equal or greater priority. This shift of focus is an admission of failure. To save the environment we will need unprecedented action — and a great deal of luck. But the change we need is nowhere in sight. Having participated in U.N. negotiations and countless climate conferences in recent decades, we confess to a dreadful sense of déjà vu as we approach the December 2009 Climate Summit in Copenhagen. There will be fresh scientific warnings and calls for collective responsibility and urgent action. A few climate skeptics will get more than their share of media attention, but they will not dent the underlying science.The business sector will highlight its ability to deliver emission-reducing technologies while at the same time urging pragmatism on the inevitability of burning more coal. Nongovernmental organizations will hang 'we-told-you-so' banners from the moral high ground. When it gets down to the hard negotiations, however, the discussions will result in 11th hour lowest-common-denominator compromises. The overall effect will be to weaken almost every nation's commitments to action. In terms of what is needed to peak greenhouse gas emissions by 2020, and then reduce them by at least 50 percent (relative to 1990 levels) by 2050, the dirty little secret is that not even the most ambitious agreement will meet this goal. If this assessment is correct, there is a need for a major rethink on how the global community approaches the issue. While no one has all the answers, here's a set of suggestions...”
“As with conventional conflicts, winning the war against climate change will not be achieved by the use of markets alone. While the power of markets will need to be used to the fullest, the whole arsenal of government policy tools needs to be wheeled out to accelerate action. Nothing should be off the table, including product bans and mandatory emissions reporting...”
“A serious international architecture. Most intergovernmental bodies have responded to climate change by forming a climate department. But they need to do more: fundamental reorganization. The World Trade Organization, for example, must have "low-carbon trade" as part of its central mission. Similarly, the World Bank's priority needs to be "low-carbon sustainable development." Efforts to put climate change on the agenda of the U.N. Security Council should be renewed.”
“None of these approaches is on the agenda — yet. The irony is that if climate change isn't stopped and escalates as quickly as many scientists fear, measures such as these will be taken anyway, but then hastily, with little coordination. This is not a counsel of despair or defeat — to the contrary. As the last decade in particular has demonstrated, there is an unprecedented level of concern, creativity and action taking place globally at many levels. Humankind can rally quickly, but leadership, engagement and resources need to be commensurate to the challenge.”
“Corporations and globalisation sometimes seem to get blamed for all the ills in the world. It is easy to forget that there have been at least three great waves of Globalisation in human history, and corporations have only played a relatively recent — if decisive - role. Whether CEOs and shareholders like it or not, how they act in the coming years will largely determine the fate of humankind. In turn, they are set to receive the attention that this role implies from government and the rest of civil society. And, whether NGOs and governments like it or not, corporations must be seen as decisive when it comes to generating the finance, technologies and entrepreneurship necessary to put us on the road to sustainability.
( At the next G8 meeting, world leaders could put the world on track to sustainability by)
The 'Third Wave' of Globalisation offers humankind two dramatically different roads ahead. One road will see us accept that it is in our collective interests to set, refine and implement standards of behaviour and performance that bring out the best of human nature and control the worst. The other will see us, still following the First and Second Wave model, working as separate self-interested groups, competing for more than a fair share of an ever- diminishing global pie, with scant regard for others or how long the pie will last.
And that may just be the great virtue of the sustainable development challenge: that it leads humankind to know itself fully — and work together — for the first time. Now isn't that a globalisation worth working for?”
'The G8 Globalisation and the Last Wave', Ethical Corporation, June 30 2005
“Sir, Readers over the past few days will be rightly perplexed about the significance of non-financial data to assessments of a company's performance. On the one hand, it is contended by one US academic that "non-financial measures just don't add up" (March 29). On the other, the FT reports growing market interest in non-financial data, on the part of both fund managers ("Fortis plans CSR action in Europe", March 29) and rating agencies ("Companies face an avalanche of questionnaires", March 26).... As non-financial reporting develops further, including through software applications that will make reporting easier and of higher value to all users, many see non-financial reporting as significant in this century as financial reporting was in the last.”
'Non-financial reporting is set to grow in importance', Financial Times, April 2004
“The (1992) Climate Convention provides four steps towards potential future abatement of the global warming threat. First, the Convention is the first international legal recognition of global warming. Importantly, this should discourage industry lobby groups and sceptical scientists — a bare but very vocal minority — from claiming that the human-enhanced greenhouse effect is a phantasy problem. Why else would governments have negotiated (it)? Second, the Convention sets a powerful objective: the stabilisation of atmospheric greenhouse-gas concentrations at levels which pose no danger of destabilising climate and ecosystems. Such an objective cannot be achieved without deep cuts in greenhouse-gas emissions. Third, the Convention establishes a process which requires governments regularly to review climate science, impacts and implementation of commitments. This can, in principle, facilitate the rapid action necessary to manage the challenge of achieving deep cuts in emissions over the decades to come. Fourth, the Convention recognises the special vulnerability of small island and low-lying coastal nations and certain other 'early victim' groups... Each of these developments is a forward step in acknowledging the problem posed by the human-enhanced greenhouse effect. However the amount of progress, from our perspective, can be liked to the first stride in an Olympic 10,000 metre final: progress of a sort, but with an enormous race yet to run, and with a clock that demands a fast time...”
'The Climate Convention: A Perspective from the Environmental Lobby', Jeremy Leggett and Paul Hohnen, Security Dialogue, 1 December 1992
