The Art of Change

Monday, October 05, 2015

18:00 - 21:00

Changing the culture of an organisation is notoriously difficult. It involves altering the decision-making process, which usually develops over years and is protected by a complex web of vested interests. Why it is that some are able to effect change, whilst the majority rage against a seemingly insurmountable machine?

On October 5th we explored how organisations can shift their decision-making process in favour of sustainability. In an opening keynote, John Elkington reflected on the change he has seen over four decades, and the attributes he sees in successful change architects. We then heard three case studies, from;

  • Richard Gillies, on his lessons from Kingfisher & M&S
  • Kate Millar, on how the Barclays "Lens" brings society into major business decisions, with the aim of restoring trust and driving growth
  • Tim Brooks, on the process that led to Lego committing to removing plastic from its supply chain by 2030

Through the panel discussion moderated by Catherine Cameron and subsequent roundtables, we laid out some of the initiatives that are emerging in pioneer organisations. Audacious targets, pricing externalities, executive pay incentives, purpose statements, leadership immersion processes and more.

Speakers

Catherine Cameron University of Essex

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John Elkington Volans

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Kate Millar Barclays

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Richard Gillies Kingfisher

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Tim Brooks LEGO

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Round Tables

The art of change

This table will continue the panel discussion on the ways that organisations can change their decision-making process in favour of sustainability. Which organisations have been successful, and what has been material in their success? Are there any universal factors that may reduce the cost and innovation risk for a new generation of sustainable business?

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Table 1(a)
1. Top down, purpose/values driven
2. Zero tolerance of reputational risk
3. Crisis – VW, Gap, Nike. Media publicising bad practice – poor work conditions/sweat shops
4. The business case – Coca-Cola – India Water issues. They found a way to manage these issues and it was more efficient so saved them money anyway.
Another example – Johnson and Johnson invested in employees health and wellbeing scheme and it paid off for them because there were less sick days and higher wellbeing and productivity.
5. Regulation – government incentive can be a big driver but it can also be a big blocker of change.
6. Collaboration with different stakeholder – eg A council that has had budget halved in 3 years so has reached out to other stakeholders who have different values to collaborate and bring about organisational change.
7. Competition – Major infrastructure business required contractors to meet ISO14001 standard. Competitors bidding for work had to improve sustainability considerations and meet the standard .
8. Structure within an organisation - Plan A M&S. Sustainability professionals in the buying teams. At the heart of the business in each dept not a separate CSR team so there is more opportunity for change and decisions can be taken with CSR in mind.
9. Transparency – business having to become more accountable so this changes their decision making and behaviour.

What are the actual/material factors that came together to allow these decisions to shift?
1. Timing- Lego - combination of a crisis, creating their ‘P’ promises (internal branding) and leadership
2. Values - Barclays Lens providing a decision making framework .
3. Employees must be inspired. Making it fun rather than doom and gloom.
4. Organisational structure – eg chief finance officer also being the chief sustainability officer.
5. Realisation of a business case for CSR – eg subsidiaries of a company will make more profit if the community is treated well. Its not necessarily people becoming more socially aware, but business aware.
6. Available information. To enable positive decision making. This leads on to reporting and measuring.
7. Which then leads on to targets and goals. Tangible things to aim for will motivate people.

What would you say to the next generation of change agents? What will they need to be equipped with?
1. Sponsorship from people at the top
2. Have the right language – talk business
3. Thinking laterally – across stakeholders. Collaboration.
4. Get an end goal and targets on how to get there
5. Material things you need to drive change like money and people who are willing to commit to this cause
6. Thinking about structural arrangements that are indicative of change. CSR mainstreamed or one team?
7. Remember reputation is really important for companies and for CEOs and other C suite.
8. Predicting counter arguments and be ready for a response to defend your actions
9. Measurement of your impact and without this you don’t know where you are of how you change
10. Positive language. Framing an issue in a way that isn’t doom and gloom.
11. Not being scared to fail – but this is counter intuitive
12. Inspiration – demonstrate the art of the possible. Seeing is believing. Show people what is possible and what they can achieve.

Table 1 (b)
Drivers of change
• Consumers now have a different awareness and are acting differently
• Interlinked challenges e.g. are companies responding to the generational change?
o Millennials – different priorities (1. Planet 2. People 3. Purpose 4. Profit – to sustain lifestyle); should all companies have a millennial on their board?
• Disruption effect – tech based revolutions. Should be asking ‘What is going to disrupt my company?’
• Sustainable Development Goals – should companies align with these?

What does change look like?
• Business model transformation:
o Is LEGO’s goal radical enough? Most of the technologies are already here for bioplastics but still not really questioning the driving effect they have on consumerism
o John Lewis’ product assortment and economic model is shifting: customers increasingly purchasing experiences rather than products
• Retailers as gate-keepers: driving change and deciding which products are ethical to sell?
o E.g. John Lewis driving consumer behaviour change towards purchasing in bulk to reduce impact of supply chain logistics
o E.g. Selfridges removed single use bottles from the shelves. Expected 20-30% drop in sales but actually shifted consumption to reusable vessels.
• Transform the product – don’t give consumers the choice, there is no choice
• Combination of reacting to change and driving change.
• NB: Inertia in big companies can make rapid changes challenging.
Who are the agents of change?
• E.g. Steve Howard (IKEA) – not interested in incremental change from the start and took CEO along to Climate Week NYC, resulting in major commitments and a remarkable shift. However, his single-mindedness and determination can make him difficult to work with.
• Is our community too nice?! Often have to rely on building relationships as don’t have the influence or power within the company to not be nice.
• Need to be brave and not constrained by precedence. If you have intrinsic motivations for doing your job, it can impact on your behaviour within the organisation.
Factors for success?
• Experimentation – success stories can help to create buy-in for future projects
• Buy in from finance team: e.g. in some leading businesses CFO and CSO seen as a joint responsibility
• Look to change what is socially acceptable (as has happened with smoking)
• Forge the relationships, if necessary a few levels above
• Be willing to accept the risk of failure
• Education & Collaboration
• Create or empower leaders – passion creates a movement and permission to do something different.
• Longer term thinking: often inherent in family-owned businesses but need to engage other forms of ownership and management to create buy-in for building a legacy
• Should we use the ‘dark arts’ of influencing and driving habit formation used by many websites?
• Are we practiced in this? Stories of failure missing?
• Bring behaviour change knowledge into CSR

The purpose of purpose

As many organisations reconsider their reason to exist, what do we mean by 'purpose' in a business context and how can it help in addressing sustainability issues? How can you differentiate between real purpose and hot air? We’ll hear from Charles Wookey, CEO of The Blueprint Trust, who will share the principles emerging from its work with Unilever, Vodafone & others.

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Obstacles:
• The Purpose of some companies is not intrinsically clear, for example Lego has a clear purpose but Barkley’s does not.
• Those you work with may not see the issues under the ‘sustainability’ theme, purpose needs to account for this by being all encompassing.
• Embedding purpose in the DNA of a company is difficult, but more than that there is a great difficulty in bringing the purpose to life.
• It is difficult to relate the overall purpose back to the day to day practices.
• Consumers expect sustainability to be ingrained but may not understand all the aspects that form the purpose.
• Helping people, both customers and employees, to see the outcomes is difficult solely through the purpose.
Red-flags:
• There are other factors that put pressure on the purpose of companies, not every company is lucky enough to be family run or have strong leadership, the pressure is to make money from innovations before giving them away.
• There is no credit for doing the right thing, but there is punishment for doing it wrong (VW is the example).
• Who the audience is for your purpose changes how it is seen, clear separation between customer and employee.
• Where does trust sit with purpose and engagement? It is distinct from trustworthiness, but in trusting a company’s purpose they must also trust in the brand.
• There is tension between financial gain and purpose.

Solutions:
• Businesses/organisations being more outspoken (like Elon Musk or Greenpeace) are more political, interested, drive innovation and change gain a great deal of respect.
• Embed the purpose of the business/organisation in to recruitment, for example Greenpeace embeds its values into their interview questions.
• A core purpose unites and integrates rather than hinders.
• Create a position of freedom for innovation.
• Make personal objectives, related to individual roles, part of the purpose, in other words give purpose internally to your business employees.
• Common language use can help, for instance ‘what will happen if you do, or do not do something’ can help in seeing the longer term purpose.
• Thinking about the tone and the internal credibility can aid in stating the purpose.
• A company can never make trust and can never build trust quickly, trust is given.
• People want to hear about how the purpose helps other people, as it brings it home for them.

Examples:
• GSK – have scientific backgrounds so they may implicitly understand the purpose more than other companies.
• PSO – their focus on education is a very clear purpose.
• Building back trustworthiness in the financial industry is ultimately so they can make more money.
• Greenpeace – looking for solutions to the big problems but internally debating whether that is there purpose.

Measuring social impact

Whilst most business decisions are based on partial information, this is particularly true with social impacts. Most social impacts remain unquantified "externalities" when the decision is made. We’ll discuss whether this needs to change, and how these externalities could be brought into decision-making processes over time. Are you optimistic?

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It is hard to capture social impact, have you been successful/unsuccessful?
• When measuring social impact there are usually only about 2-3 people in a large company who understand the metrics. There is not a general toolkit or best practice. Trying to capture it remains a dark art.
• The challenge is that many companies are still sitting in ivory towers, the challenge is to measure it, you need to first be able to define it, and a 2 person CR team can’t measure that. Sustainability and CR needs to be fundamentally understood in the core business in order to measure social impact.

What are human rights impacts on a company?
• It’s hard to say because its often not factored until something goes wrong
• Again there were many interpretations and needs to be clearly defined

Does your organization have a grasp on capturing social impact?
• Yes and no. There is a danger with setting targets in regards to social impact, not hitting a target is not always a bad thing
o You may be pushing your boundaries and getting out of your companies comfort zone and find more innovative ideas on how to measure, so failing to hit a target isn’t really a loss
• One company at the table use social mapping report, which allows them to pick areas to recruit from and where will make the biggest impact. Doesn’t necessarily answer the question but certainly helps
• G4 helps materiality and where you need to focus your efforts but it’s very laborious

Are there examples of people understanding social impact or change that is fed back to the business?
• Major impact is done around people, brand and employees, Core impact is around partnerships.
• From sustainability and sourcing point of view there has not been strong measurement
• One member of the table spoke about a community investment project they led in a partnership with another company. Benefit of the project is to raise the level of education the community and in doing so you can test if the levels of literacy have increased, so it was measureable

How did you test measurement?
• Used consultancy
• Make sure you are hiring locally and that way can measure community impact
• Work with local suppliers and create a talent pool, you can then measure a whole country

What is the Goal/Aim? What outcome are you looking for? What tools did you use?
• To create something more long term, that way it’s something more quantifiable. Ex: waste reduction
• When you can align impacts with business objectives, measuring becomes much easier
• The challenge is on ownership too. Companies are scared to make claims if they aren’t sure they’ve actually done something. EX: School initiative, did the company actually help with the literacy levels, or are external factors at play i.e. parents reading to kids at night
o Attribution of what really made the change

Final thoughts around the table
• Feels better, not just her company that is confused on measurement “glad it’s not just me”
• At least we are having the conversation and moving in the right direction
• Feel much more comfortable that they’re on the right track and their company if on its way
• Need to further align with corporate purpose and goals
• More conversations and discussions to ensure better programming
• Don’t seek out a specific outcome, just take action
• We’re not focusing on social issues enough, the focus is mostly on the environment
• Glad so many industries are interested
• Needs to be wired into core business
• Need to clearly define, to more effectively measure

Carbon intelligence

Thanks to experimentation by pioneers, today's organisations have a range of options for reducing their carbon impact. These include targets for different scopes, commitments to CDP positions, using shadow prices and renewable energy commitments. We’ll discuss if a universal solution is emerging, and what tomorrow’s carbon strategies may look like.

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➢ Everyone agrees that there is no “one size fits all” approach to reducing the impact. It will be reduced by case by case basis and lots of different metrics from different organisations.

➢ Unanimous agreement that in 10 years time, solutions being currently used and those used in the future will result in it becoming the “norm” and embedded within company policy.

➢ Ambitious targets and big ambitious targets MUST be set as the highest goal to push the agenda. Acknowledgement that it will be unlikely to reach those targets but if we are at least striving to reach them, there is more of a chance of getting closer to the target.

➢ 4 areas to look at: 1. Power
2. Transport
3. Industry
4. Buildings

➢ UK problems - e.g. railways: Victorian infrastructure to point where a lot will need retrofitting, lots of different train operators / stakeholders, lack of money also makes to challenging to implement change.

➢ Companies must make the information open, transport and digestible to investors

➢ Educations and behavioural approach needs accelerated.

Conclusion
Over time it will become the norm to reach these sustainable goals and implement them into the business. It take 10 years to change things, before there is a notable difference. There is no one solution which can be applied, it will be a case by case scenario.

Business model change

Changing the way an organisation makes its money can open the door to triple bottom line success, but is at the extreme end of change. Companies such as Interface and Rolls Royce have used new business models to create niche markets and increase customer loyalty and profits. How can we encourage a new generation of business leaders to change their business models?

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The table discussed examples of organisations which have had success from evolving or changing their business model and how this may have been achieved, as well as the difficulties and challenges this produces. Examples included:
• UK Green Building Council’s Future Leaders program - aimed at young building professionals through providing coaching and education regarding innovation within the building industry. Key benefits were that they were given time and opportunity to discuss between themselves and generate new ideas. Issues arose when trying to translate this thinking into the established businesses they were part of upon program completion.
• Silo restaurant, Brighton – challenged traditional restaurant model by using waste food rather than fresh, business is thriving.
• Balfour Beatty – looked at full scope of their impact and as a result began considering designing buildings for deconstruction, so materials can either be easily recovered or reconstructed elsewhere. Idea of materials passport, also similar approach in maritime industry. Discussed difficulty of embedding new ideas into an industry which is set in its ways.
• Philips – lighting, example of shift in industry as a whole. Not selling goods but selling the service. E.g. level of light not number of light bulbs, number of holes in a wall not the drill and drill bits. Delivery of service as opposed to goods, possibly reverting to previous business models based upon hiring of goods rather than ownership.

The second part of the discussion centred on how to enact change within an organisation, key factors:
• Education – both staff and senior management; what is sustainability? Give them the reason to change.
• Large organisations need the mechanisms to bring new and innovative ideas into the established model. Very difficult to do, however small agile “start-ups” have the ability to start fresh and look at new methods of working as they have the right environment to allow change and creativity to occur.
• Alternative is legislative approach, which could be both positive and negative but will force change to occur.
• Enabling environment - allows ideas and change to occur; giving individuals confidence to present ideas
• Reflection and time to be creative - thinking space to reflect on past and be creative about the future, be it formal or informal self-reflection. For example Google employees, it was claimed, were given time per week to work on own projects and ideas.

Lastly the push and pull factors of what drives change were discussed. Will consumers demand better environmental performance or is it up to companies to change their behaviours? Is it expected/trusted that large organisations will behave in the most responsible manner and the customer doesn’t have sufficient, motivation, time or knowledge?
Some arguement that the benefits and efficiencies of the circular economy may drive change all by its self, however this could also lead to negative changes.

Breakthrough technologies

Most boards worry about which disruptive technology will "Uber" their business. We’ll discuss which of these technologies have inherent sustainability advantages, and how sustainability teams can use them to deliver change. Big data, IOT, blockchain, graphene, hydroponics etc. Is this a new area for sustainability, and does the sustainability expert need a tech skillset?

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• Some industries have grasped the importance of failure and have embraced it
• We must learn to ‘fail fast and fail quickly’ in order to learn quickly from our mistakes. Failure is an indication that we are taking risks. We must remove the stigma attached to failure, because when people are taking risks and failing, there is often a breakthrough round the corner.
• This is most important within the technology sector and we must cotton on to the need for patience and investment in small tech start ups.
• The problem however is scaling up small but smart ideas in to the mainstream. The odds of establishing a small and novel idea are slim but the risk is worth it.
• Bigger companies need to accept that they may not be the one to invent the next big thing so the best thing they can do is keep their finger on the pulse by investing in smaller companies and buying ideas within technology and building teams to help scale them up.
• We’ve hardly scratched the surface when it comes to big data. The future of technology is in utilising the power and insight big data provides and then innovate accordingly e.g. technology built in to cars that sends an email to local authority with the GPRS location every time a car goes over a pot hole within their borders.
• One of the key challenges is communicating and sharing potentially sensitive information (in terms of big data) to the wider public and tech network. There is a conflict of interest between the need to be more transparent and disclosing information that could be commercially sensitive and provide competitors with a competitive advantage.

Futureproofing

How can businesses make good decisions in times of accelerated technological and social change? We’ll discuss how to identify the technologies and social trends that will impact the quality of the decision, and who should feed into the decision. What does an increasingly unpredictable future mean for investment levels and diversity of thinking required in decision-making?

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To futureproof a sustainability policy the message needs to be simplified. There are too many internal policies within an organisation that if it is not simplified then it will not be effective
Recruiting staff through a values recruitment process can also help to maintain a culture which enables futureproofing
There needs to be ownership amongst different teams and for people to use their own initiatives
It is important that any policy or initiative stays live and relevant
It is important to promote examples of when a team or individual do get it right
There needs to be collaboration and a culture of honesty around failure
Need real people in the business who will act as champions
There was a question around how organisations should find out the right information regarding change and technological advances. It was agreed that industry collaboration was important for this as shared thinking could lead to an increased chance of change
An organisation can outsource aspects that are not core to them such as facilities management to those who are most skilled in this area
Bringing together large groups of influential leaders can be very powerful and a catalyst to change
Google keep staff engaged by allowed a ‘passion project’ to be undertaken by all staff one day a week
It is important to bring the stories to people in their own language
Strategies should not be distributed without proper training
There was agreement that when an organisation is already leading it is harder to keep people ambitious. Companies need to develop engagement strategies to prevent this

Changing society

Does the table agree that society is a hindrance to building a sustainable economy? Or is it just when we become system actors, such as customers and investors? How can business galvanise groups or society to play a more meaningful role? From M&S Beach Clean Ups to open letters to newspapers, is this the future for business or is there too big a trust problem?

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DISCUSSION
• Is society separate from business? Can working communities be the drivers of change?
• People seem to leave their personal values at home and keep them separate from their corporate life
• Why does it seem that customers don’t care about sustainability? Perhaps they do care but are unwilling to change their habits. Companies need to make it easier for consumers to be sustainable.
• If so, we need to have clever and compelling marketing that helps people care about sustainability.
• Consumers are interested in affordable and quality products, sustainability is their last consideration.
• Airbnb and Uber are successful examples of the shared economy which could lead to a more sustainable future. Have they succeeded because of their cheaper prices or because people enjoy using less controlled services that feel like grassroots movements? Both play a big role in consumer choices, people will look for the best service that offers value for money, but everyone has a different idea of what that ‘value’ means.
• Is institutional change the only way forward or should we trust people to care?
• Civil society is at the heart of many major changes in society but its roots are in the power of local communities. Local communities are starting to lose that power, for example in the UK with the weakening of local government.
• Is society a hindrance then, if we are relying on a small group of people to take action?
CONCLUSION
• The answer might be that society, business and government need to all come together and change things for the better. Everybody needs to stop thinking about their short term interests.
• Ultimately, we need to think freely about how we can engage with people who drive change, whether they are business leaders, civil society groups or government.

A net benefit future?

Net Benefit is an increasingly popular way of using natural and social capital accounting to embed sustainably in company decision-making – it involves quantifying the social and environmental costs so that options can be compared with each other. Question: is net benefit just for certain types of decisions, or could it be the key to socialising sustainable decision-making?

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CONS
· Net benefit can highlight issues one wouldn’t normally have thought. However we also shouldn’t oversimplify some important issues: net benefit does not always communicate risks very well and shouldn’t be used for automatic decision making. For example comparing nuclear to coal on net benefit basis would make nuclear a clear winner
· Net benefit also shouldn’t give an impression of false accuracy. Some users still express reservations on the concreteness of the measurements and metrics
· Do we really need to measure the net benefit of employing apprentices for example? Perhaps not, community benefits and measures are already much better understood compared to natural capital (environmental) impacts, where net benefit may be better suited
· Calculations are inhibited by lack of quality data; at the same time this is not always the main problem as someone is probably collecting the data making inter-team communication the central issue to tackle
· Scoping a net benefit project could be a daunting process for an organization to engage with at first. This is the next stage of conversation but many seem to be struggling with the scoping stages even if they have a clear roadmap and mandate to do so
· There could be an issue with the name itself: it suggests the user intends to portray a rosy picture when in fact a proper assessment may reveal it has a net impact
· Are we just regurgitating everything instead of getting on and doing stuff? On one side the benefit of net benefits is clear, and this metric and accompanying framing seems able to engage business. On the other is there a risk of “kicking the ball down the road”? At the same time natural capital accounting itself is anything but a new approach having been around for more than 20 years

PROS
· Natural capital metrics help better understand impact on society. Net benefit assessment is a future looking metric, it sheds light on non-financial issues that could become financially material, thus allowing the decision maker to engage with these issues in a constructive and informed manner
· They also help frame the conversation for those not accustomed to it. Speaking the language of the one you want to influence is valuable approach
· Most businesses still aren’t fully comfortable with environmental and social decision making so natural capital accounting and net benefits should indeed bridge these gaps, embedding the decision making practice quicker than it normally would have been embedded. Ultimately enabling sustainability professionals to speak the language of business
· Natural capital accounting can also reveal business value at risk by shedding light on societal impacts which could present contingent liabilities
· Fiduciary duties of investors require them to be cognisant of all potentially material risks in a portfolio: but what’s the time horizon?
· Holistic approach to account for the true value of businesses and ability to calculate Total Impact
· Beauty of accounting lies in monetizing value: Same story as when you monetize the benefit brought in the corporation
· Net benefits should be adopted even more widely by the design stage of products and by investors choosing or assessing portfolios
· The lack of standardisation was a considerable constraint to natural capital accounting however the Natural Capital Protocol currently under development by a consortium of leading organizations is acting to address this

The art of target setting

This table will discuss the merits of having an element of "stretch" in targets, and what it means for the innovation process. What do you like and dislike about Lego's commitment to remove plastics by 2030, or Unilever's to double its business whilst having its impacts? Should targets be public, and should failure be accepted as a possible outcome? When is stretch right?

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From the range of businesses represented around the table, the discussion is initiated with the focus of individual ‘stretch-targets’ that are allocated internally and externally by said companies.

Consensus defined that financial stretch targets/KPI’s with financial incentives/targets can often amount to achieving goals, however can in-grain an unfriendly business culture with individuals and teams involved in trying to work towards them; is this approach best?

These financial stretch targets have often contrasting effects when related to sustainability; financial targets equal GROWTH, sustainability targets usually equal REDUCE. Is this a conflict of interest for companies? Which will they prioritise or is there a happy medium?

This happy medium could be emphasised by a business’s outlook that excepts ‘It’s OK to fail’, outlined by Lego’s plan to remove plastic from its supply chain by 2030. It’s an ambitious target and one they know to be a challenge, however by breaking this HUGE target down into small and achievable increments, at least if there is a shortfall from the overall plastic removal goal, the progression of steps means at least some sustainability objectives are achieved along the way.

Further, with a large stretch target broken down into ‘mini-successes’, the constant recognition of achieving smaller goals can gather momentum and support from stakeholders, employees and the business’s market audience. On the flipside however, this potential or recognised failure must be manageable, as the crash can lose commitment to the cause and the stretch target scrapped and dismissed.

With the appeal of ambitious stretch targets for a business being beneficial through publicity and commitment to sustainability, is there any miscommunication or a lack of transparency between internal and external targets? Do organisations put themselves under too much pressure to achieve targets, who are the true judges of failure? NGO’s? Government? Environmental professionals? Is the pressure applied by these parties fabricated and blown out of proportion internally, does the importance of achieving sustainability targets really translate to the consumers. How can we as sustainability professionals promote this importance further?

Stretch targets are present in all organisations, whether it’s Virgin’s space tourism goals or Lego’s non-plastic building blocks, however maintaining a balance between both financial interest of the company and the need for sustainability within their marketplace regardless of what capacity that can be achieved, without this balanced approach, a conflict of interests will always be ever present.

The shift to renewables

The use of renewable energy divides opinion. Organisations such as IKEA and M&S are committing to exclusively use renewable energy, citing reasons such as price predictability and their sustainability agenda. Others see renewable energy as an expensive way of reducing carbon, favouring efficiency. How compelling is the case for change, and when does it make sense?

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Challenges
Feasibility
• Large vs small companies: It was pointed out that large retailers have the space and profit margin to install and afford solar panels, invest in offshore energy etc, however smaller players, in particular further up the supply chain, may not have the same pre-requisites
• The companies driving the large scale deployment of renewable energy generation on site are often family owned businesses (such as IKEA), that can consider long-term investments due to lower pressures from shareholders
• Uncertainty on energy price in the future was cited as another barrier to investment decisions
• It was recognised that currently, the focus is on energy efficiency due to the ease of implementations and a visible return on investment in the short term

Demand/Awareness
• An example from the construction sector was shared: when presented with the option to have solar panels installed or not, clients/consumers choose the cheaper option, i.e. not to pay a premium for the solar panels
• An attendee mentioned that many decision makers in an organisation may not be aware of the issues of common energy sources (energy security, environmental impacts from using coal etc), pointing to an attitude of “coal has provided energy so far, so why shouldn’t it in the future”. The board needs to understand the issue and possible solutions to make a decision towards long term strategies and renewable energy

Payback period
• It was estimated that currently the payback period for investments for an on-site solar panel installation is 10-12 years
o Companies often consider a payback period of 3 years when making investment decisions. Hence a 10 year payback period would not meet this criteria. Furthermore, it was pointed out that this period may be too long for companies, due to uncertainties whether a manufacturing site or retailer will be on the same site
o Consumers, e.g tenant/house owners: It was cited that in the UK on average, people move every 8 years, which may make UK residents hesitant to invest
Incentives
• The government can be a barrier. An attendee from the construction sector shared the example of the government stopping the construction of an offshore wind farm although the project was economically feasible.
• Attendance shared the sentiment that the government does not set enough incentives and in fact does not support energy generation from renewables. Other markets abroad are being explored by providers. Furthermore, energy policies did not seem clear and simple enough.
• The options are not always clear and obvious. An attendee gave the example of visibility: A consumer cannot choose between a green and a dirty plug – there is only one. Hence a pro-active attitude is required if consumers want to ensure to purchase green energy.

Opportunities
Companies
• Encourage and support suppliers to move towards using or generating renewable energy, in particular if energy consumption in the supply chain is higher than in a company’s own operations
• Invest in advancements to store energy to reduce uncertainty
• Re-consider lengths of corporate strategy – focus on the long term rather than the short/medium term

Government
• The government could set standards – if solar panels would be the norm for new builds than its deployment would not be depended on client demand
• Carbon tax – introduced by the government or by individual companies – can help to raise awareness and change behaviour

Sustainability Professionals
• Raising awareness on the benefits of renewables such as energy security
• Help to target the right people with the right discussion, not only the “already aware”
• Make renewables cool!

Paris: what more can we do?

With the Paris climate negotiations less than 100 days away, and a lot of uncertainty over the outcome, can business do anything else to effect change? What role should businesses be playing in the divestment campaign? Are there campaigns, such as the RE100, that are gaining critical traction? Can business effect change without a comprehensive policy framework?

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Obstacles
- Carbon is hard to understand as material to the business.
o How do we define materiality in terms of sustainability?
- Things around carbon pricing and government changing have led to challenges of certain investments and looking for elsewhere to invest that money
- Returns and paybacks need to be clear in order to make a business case
- Challenges/opportunities (Schneider):
o CEO very involved in COP21 since it is in France – use as a method to engage customers
o People, Planet, Profit are main pillars
o Currently running internal sustainability campaign
o Won award of 9th most sustainable company
o Directors are pushing for Energy efficiency
- Challenges/opportunities (RBS):
o With the new government and their launch of multiple consultations there is now a lot of uncertainty around the future of renewable energy subsidies, this isn’t just impacting our customers’ investments but for our own portfolio of buildings we had been looking at installing solar to reduce our operational impact but unclear which is best option now
§ CDM/voluntary carbon market for example
§ Technologies that don’t rely on subsidies like lighting
o Energy Efficiency Review creates more uncertainty
o Already #1 lender to renewable energy projects in UK (2011-2014) and very transparent about energy use, and have goal we already procure to use 100% renewable in UK and 60% globally, so there may be a risk that by signing a pledge we could be seen for ‘jumping on the bandwagon’ and which takes eye away from important actions

Takeaways
- Integrate sustainability into all areas of the business
- Education is key – raising awareness
- Conversation on Sustainability has to come from the board
- Mandatory training and behaviour Change
- Important to use commercial speech in language around sustainability – prove how it adds value to the business

Questions
- How do we define if Paris was a success or not?

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.
Who's Attending