The One Blog Post You Should Read This Year | PKF Francis Clark
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Merry Christmas! Our offices will be closed from 1pm on Christmas Eve, reopening on Tuesday 4 January.

If you only read one blog post this year – make sure it is this one!

This blog post is not about finance – but it contains some very key figures.

This blog post is not about the future – it is about the here and now

A good business is a sustainable business

This blog post is about the Intergovernmental Panel on Climate Change (IPCC) report issued yesterday – and yes it is about business.

Businesses do not operate in a vacuum, and whilst ‘global’ and ‘geo-political’ issues that may be associated with an IPCC report may seem a bit divorced at times; their impact will be real and consequently need to be understood and planned for because of the increased costs of goods (if environmental impact is better reflected in the cost or goods; increased costs of natural materials if they become scarce or changes in consumer behaviour).

I am not an expert on climate change, I am not even a member of the PKF Francis Clark Energy and Infrastructure Advisory team. What I am, is a concerned individual who firmly believes that a good business must be a sustainable business and that sustainability must encompass environmental impact (even to the extent that this is not properly factored into the concept of ‘financial impact’).

The deficiencies in modern economic teachings that have led us to this point need to be addressed – see for example Kate Raworth’s excellent Doughnut Economics – but in the interim (i.e. from now) we all have a personal and corporate responsibility to take action to mitigate our impact on the planet.

The costs on non-action are summarised in one newspaper headline “We have 12 years to limit climate change catastrophe, warns UN – Urgent changes needed to cut risk of extreme heat, drought, floods and poverty, says IPCC”.

The IPCC Report

The IPCC Report can be found here. The Headline Statements which accompanies the report looks at the impact of halting the rise in global temperatures at 1.5% as opposed to 2% and this includes:

  • By 2100, global sea level rise would be 10cm lower with global warming of 1.5°C compared with 2°C.
  • The likelihood of an Arctic Ocean free of sea ice in summer would be once per century with global warming of 1.5°C, compared with at least once per decade with 2°C.
  • Coral reefs would decline by 70-90% with global warming of 1.5°C, whereas virtually all (> 99%) would be lost with 2°C.

The ‘good news’ is the “limiting warming to 1.5ºC is possible within the laws of chemistry and physics, but doing so would require unprecedented changes,” and requires “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities”.

And further that “Global net human-caused emissions of carbon dioxide (CO2) would need to fall by about 45% from 2010 levels by 2030, reaching ‘net zero’ around 2050. This means that any remaining emissions would need to be balanced by removing CO2 from the air.”

Call to action

For those who see ‘environment’ as somehow decoupled from ‘economics’, please see for example the seminal work of Stern Review on the Economics of Climate Change. There is a cost of not doing anything about global climate change, just as there is a cost of doing nothing about plastic pollution and air pollution.

I suspect that we have been in possession of the full facts of what we are doing to the planet for some time (see for example the number of books on climate change) but I am hopeful that the immediacy of the timeframe in the latest IPCC Report will be a stimulus to real action at a personal level (including exercising our power as consumers); business and governmental level.

There are a number of guides to reducing our carbon footprint and I suspect we all know what we need to do, so to steal (recycle?) a famous clothing brand’s slogan – Let’s Do It!

The business of sustainability

As I said above, a good business needs to be a sustainable business and, in a number of cases, even our deficient economic model does see financial benefits accrue to those embrace sustainability (e.g., through enhanced revenues and/ or reduced costs).

We are aware of a number of potential sources of funding for advancements in Research and Development that directly or indirectly are connected to sustainability e.g., Innovate UK competitions, including a few covered on a recent blog post.

If you have been active in business in improving your “own sustainability while positively growing the natural environment in Cornwall and the Isles of Scilly” why not become a showcase to inspire others through entering the Cornwall Sustainability Awards 2018.

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
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