BusinessGreen’s Leaders Forum revealed that despite policy uncertainty the drivers behind low-carbon development remain as robust as ever
What is the secret of effective leadership?
That was the question that dominated proceedings at the inaugural BusinessGreen Leaders Forum this week, hosted in association BCS - The Chartered Institute of IT, throwing up a range of answers that are likely to resonate with green businesses as they battle with increasingly hostile forces.
Opening the forum, the Carbon Trust's Tom Delay made the interesting point that leadership is characterised as much by the ability to anticipate change as it is by the belief that great leaders drive social and economic change through sheer weight of will or talent.
Of course, in reality, it is impossible to distinguish between these two complementary forms of leadership. Do successful business leaders create demand by developing products and services their customers did not know they wanted, or do they simply anticipate the pent-up demand and realise the world is changing in a way that would make their particular product popular? The answer often lies somewhere between the two extremes. And yet it is the myth of the leader as exceptional, world-shaping innovator that dominates popular imagination.
As the discussion throughout the morning made plain, both forms of leadership are vital to the low-carbon economy, but it is the ability to anticipate change that is most likely to determine green business success or failure.
Those firms, be they green startups or progressive multinationals that can position themselves in readiness for the inevitable shift towards lower carbon business models and technologies, will inevitably prosper, as long as they shift position at the right time and pace.
The difficulty, and the real leadership skill, comes in gazing into your crystal ball and working out what that change will be and when it will happen. This is challenging at any time, but it becomes even more complicated during a period when each month appears to bring another wave of global instability. How do you plan for five years hence when you can't be certain the eurozone will still exist, you can't guarantee the US won't bomb Iran and virtually every official economic prediction made in the past two years has been close to meaningless?
The answer, according to Tom Delay, chair of the energy and climate change select committee, Tim Yeo, and many of the other speakers at the BusinessGreen Forum, is that it is easier than you think.
As Delay argued, trying to predict the future shape of the government's green policy is extremely difficult given the current economic climate and the intense pressures being placed on politicians to downgrade an agenda focused on long-term gains. Witness the mishandling of the cuts to solar feed-in tariffs as evidence of this crippling policy uncertainty.
However, green policy is no less certain, and in many ways a good deal more certain, than many other aspects of government policy. The government may anger green investors by constantly tinkering round the edges of its green policies, but the general direction of travel in favour of low-carbon development remains clear and is as guaranteed as any national priority can be by the Climate Change Act and the political consensus on the need to tackle greenhouse gas emissions.
More important still, as Delay again argued, the government does not matter as much as many people think when it comes to the development of the low-carbon economy.
The government is too unreliable and its policies too complex to provide the concrete driver firms require for long-term, low-carbon investments.
However, that is not true of many of the other drivers encouraging or forcing firms to decarbonise their business models.
Energy efficiency remains the prime example of a non-policy related driver pushing businesses to go green. Regardless of government policy, it makes sense to invest in energy efficiency, particularly when many measures, such as the Green IT improvements outlined at the forum by the BCS, can deliver returns on investment in two or three years. Genuine green business leaders anticipate energy bills will rise further in the coming years, making efficiency an even more attractive investment.
Similarly, green consumers and corporates remain a more reliable driver of low-carbon progress than many governments. It may sound counter-intuitive given the state of the economy, but according to Delay there is a growing body of evidence that UK consumers want green products. They do not shout from the rooftops about it, but they want businesses to do the right thing. And, just as importantly, large corporates want their suppliers to deliver green progress and are favouring those firms with the best environmental record. This trend is repeated among investors, growing numbers of which want the firms they control to have some form of strategy for managing and exploiting climate change risks and opportunities.
Which brings us to the real elephant in the room: climate change. It is the one all-encompassing driver of green business development that is not going away. The climate and the havoc it can wreak does not care one iota for global economic recession or wavering government policies (it is interesting that the clearly orchestrated campaign against green policies that has emerged over the past few months is driven by a number of groups that previously argued against action on climate change. They have since realised their scientifically illiterate arguments have little traction and are now instead arguing that the high cost of decarbonising the economy means we should stick with the carbon-intensive status quo, Sadly, this approach is gaining far more traction).
Real green business leaders know climate change is not going away and as such are working hard on greener business models on the grounds that they need to adapt to inevitable changes in climate and are still optimistic enough to believe politicians will realise drastic government action to tackle emissions will be required eventually.
These drivers add up to a scenario where, regardless of the unstable policy environment, green business leaders can anticipate near certain changes over the next decade that will see energy efficiency become a highly attractive investment, demand for green goods and services from consumers, corporate customers, and investors increase, and climate change impacts force businesses and governments to accelerate efforts to adapt and decarbonise.
Moreover, it is possible to anticipate that many of these changes could take place remarkably rapidly. Business, economic and cultural history is littered with examples of significant changes that were once unimaginable, which then became normalised in a matter of years. Be it the banning of smoking indoors, the criminalising of smacking children, or the demonisation of drink driving, it is possible for social and political pressure to reach a trigger point at which governments finally act in the social interest, by legislating to ensure that changes that were happening anyway accelerate and become entrenched.
Whether gradual or rapid, these changes are as close to certain as anything can be in an increasingly volatile world, where we can't even be certain of truths that were previously held to be self-evident (hell, for the first time in modern history we can't even be certain that Silvio Berlusconi will remain as prime minister of Italy).
Green business leaders know this. They are anticipating the changes and are positioning themselves to take advantage. And that, ultimately, is what true leadership is all about.
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