Deloitte's green boss decries climate policy "limbo"

At the end of last year, Deloitte Touche Tohmatsu appointed Nick Main to take on the newly created post of global head of climate change and sustainability. Main had previously been chairman and chief executive of Deloitte New Zealand, where he lived for 30 years, but, since taking up his new role, he has returned to the UK – the land of his birth.

During his time in New Zealand Main joined the country’s Business Council for Sustainable Development, which he chaired for three years. He was also appointed to the Council’s Climate Change Leadership Forum, where he helped to design New Zealand’s emissions trading scheme.

BusinessGreen.com caught up with Main to get the consultant's view on how to ensure sustainability issues remain a corporate priority

BusinessGreen.com: What is the aim and remit of your new role?

Nick Main: We have a lot of clients that are having to manage a transition to a low-carbon economy and deal with complex laws and regulations that are different from country to country. So there's work to be done in helping them to manage that transition. Climate change is the topic of the day, but sustainability in general is also getting a huge uplift on the back of it.

My remit is to build our revenue in this area and ensure that we have offerings that meet client needs. But it's also about ensuring that everything we do internally has sustainability in mind. Every consulting assignment will have a sustainability strand and that involves as much change for organisations such as us as it does for our customers.

So if we're looking at strategy or supply chains or information systems or audit work, we have to assess the risks and opportunities – for climate change initially, but also in terms of carbon exposures and sustainability. So it's about asking questions and exploring thought processes to encourage everyone to take responsibility.

Some recent studies have indicated that environmental concerns have dropped down the corporate agenda as a result of the recession. Do you agree with this contention?

I don't think it has dropped down the agenda, but the climate change debate has slipped back somewhat and the fact that there was no global agreement at Copenhagen didn't help. Because there are no targets to determine the price of emissions to help businesses make the transition to a low-carbon economy, they don't know what any future regulations will look like and so there's a certain amount of limbo.

Businesses know that carbon emissions et al will be regulated eventually but until they know how, it's difficult to make good business decisions beyond understanding that higher carbon prices will be driving the cost of everything at some stage. But we won't see action in this area take off substantially until there is regulation.

Nonetheless, the recession has not changed consumer preferences or the fact that businesses are still identifying environmental issues as major trends. At least two surveys that I've read recently have said that this is still on the agenda. And if that's the case during the toughest economic crisis we've faced in many years, it's likely to remain that way into the future and so we'll continue to see changes in the way that people think about business.

Is the same true of wider sustainability concerns?

Sustainability is generally a voluntary market. It's about costs, what businesses think will generate them competitive advantage with customers and how they position their organisational strategy. So it's a slower burn but still a fairly steady one.

The point is that if you know you have to report on these emissions in a certain way each quarter or comply with those regulations in a year's time, you understand that it will hit your balance sheet and your profit and loss account. So you have to manage the risks and get a system in place quickly.

But if you're thinking about cost advantages and the like for products, it takes longer to work out and there's less of an imperative to do things immediately so you can be more thoughtful and strategic. There are also fewer standards and less rigorous reporting frameworks than there are for carbon reporting so it's up to you to pick what's relevant.

What does sustainability mean in a business sense?

It goes back to the Brundtland Commission's definition from the 1980s, which says it's about meeting the needs of people today without affecting the ability of future generations to meet their needs. So in that framework, it's about how you design an organisation to carry on in a certain line of business indefinitely.

This means that it's not about organisations that take a resource, process it, sell it and when that goes, there's no business left. It's more about closed-loop manufacturing and supply. So you take a product, sell it and recycle, reuse and rehabilitate it at the end of its life into one process or another.

This means that it's about thinking in terms of the whole life cycle and, while that may be quite complex, the more that businesses solve these particular problems, the more likely that they – and we – are to have a sustainable lifestyle and future.

People sometimes talk about economic, environmental and social issues in this context and there can also be cultural and spiritual ones too, but it's mainly the first three. So it's about how organisations can meet all these requirements, while operating a profitable business.