The governor of the Bank of England, Sir Mervyn King, has warned investors, politicians and academics of the financial system’s acute exposure to high carbon and environmentally unsustainable investments. This economic dependency on fossil fuels and non-renewable resources is viewed, by many, as a potential risk to global financial security.

For coal alone, recent statistics show how nearly one-third of the market capitalisation of the FTSE 100 is now made up of natural resources companies. And still, new extractive companies trickle into London in a steady stream to raise capital through issuing shares. The result? The FTSE indices are becoming increasingly carbon intensive at a time when we urgently need to shift towards sustainable investment.

Only this week, mining firm Xstrata has formally announced plans to merge with Glencore, the world’s biggest commodity trader, in a $90bn deal. It will be headquartered in Switzerland but listed in London. Oil empires and mining conglomerates, are still some of the most exorbitant and commonly held shares. This is a dangerous path for the future.

The economic crisis not only exposed the fragility of our banks but the dependency our global economic stability had on the banking system. For banks, the crisis gave a new meaning to the term sustainability. Before the crisis, sustainability was regarded as simply an anecdotal concept that banks could choose to dabble in. Post-crisis, it has become a measurable science, essential to securing a strong economy in the 21st Century.

Like it or not, we have reached a critical stage in the world’s development. Banks must support clean technology, ethical consumerism and sustainable living.  “The banking system provides the risk capital that underpins the functioning of a successful economy,” says Richard Burrett, adviser and sustainability consultant at IndustryRE. “The decision banks take on the deployment of capital will determine which sectors of the economy are supported and encouraged,” he added.

True sustainability in banking is far from straightforward but arguably the most important branches of the green sector to get right. Launched at Global Roundtable in Washington DC last year, the UNEP FI Guide to Sustainability and Banking is a welcome and essential resource for banks lost in the complex waters of sustainable finance. Pragmatically advocating innovative financing, the report springs from a firm belief that economic development must be “compatible with human welfare and a healthy environment”.

It details the business drivers for banks to implement true sustainability. All of which are very familiar to the green sector: a chance to clean up a tarnished reputation, make efficiency and costs savings, adopt a superior system of financial risk mitigation, create new business opportunities in an emerging market and comply with an increasing number of environmental and social regulations.

What do we mean by true sustainability? Banks must create a sustainable market disciplined by long-term thinking and thorough risk management. An inclusive relationship with regulators and stakeholders is essential. Capital must be tangible. Banks must make the connection between invested funds and its final destination. It needs a deeper understanding of the social and environmental impacts of investment decisions. It requires a transformation. Integrated reporting, government regulation or pension fund allocation alone won’t generate the level of change our future economy needs. It must be central to the corporate identity of the bank.

“In the resource constrained world of tomorrow, banks need to ensure that their lending and investment activities recognise the emerging set of drivers that will shape the next economy,” says Richard Burrett. “Sustainability strategies in the banking sector must be embedded in the lending and investment decision making of the institution. Financing business as usual is not an option. Banks need to finance the future.”

The UNEP report cites an award-winning approach implemented by the Industrial Development Bank of Turkey (TSKB). It structured it’s sustainability strategy around four areas: minimising environmental and social risks rising from lending activities; managing internal environmental impacts by reducing water, energy and paper usage and cutting carbon emissions; raising awareness and driving positive change in stakeholders; and, perhaps most importantly, promoting sustainable banking products such as financing renewable energy, energy efficiency and environmental investments. It’s certainly a systematic and forward-thinking strategy.

Banks also need to think about the scope of their sustainability strategies. Will they be extending it across subsidiaries, branches, holding or financial intermediaries? Absolutely, but the logistics of such a broad strategy need to be carefully road-mapped. Sustainability measures must be adapted to the local needs of that particular area but driven from the top.

Banking is certainly an industry in transition. While the government closes in on enormous bonuses, the somewhat battered sector is reconfiguring itself for a very different future. We need banks. We need big business. Our society is dependent on these industries. Our financial systems are the pivot for sustainability. Sustainability will define our future and banks are so fundamental to this future. They must lead the way when it comes to best practice in sustainability.

Although Britain is among the most well prepared countries in the world, it still faces over 100 climate change risks, according to a recently released climate change risk assessment from the Department for Environment, Food and Rural Affairs (Defra).

Among the more troubling of these threats—particularly where business is concerned—is the prospect of a much higher risk of devastating floods. In the Climate Change Risk Assessment (CCRA) Defra claims that by the 2080s, due to the effects of climate change and population growth, annual damage to property and buildings as a result of floods could reach between £2.1bn and £12bn (the annual figure currently stands at about £1bn). The national risk assessment also claims that London could experience between 27 and 121 days every year where the temperature rises to above 26 degrees Celsius by the 2080s, compared with 18 days at present. Hotter summers could present significant health risks and also put pressure on the UK’s water resources, particularly in the Thames Valley.

But climate change will also present opportunities, according to the CCRA. For example, melting of Arctic sea ice could lead to the opening up of new container shipping routes. Meanwhile, there could be opportunities to improve sustainable food production, wheat yields could increase by as much as 140% by the 2050s, says Defra. Lord John Krebs, Chair of the Adaptation Sub-Committee of the Committee on Climate Change, said: “Without an effective plan to prepare for the risks from climate change the country may sleepwalk into disaster.”

So at the same time the UK government announced a National Adaptation Programme designed to prepare the UK for the effects of climate change, including the risks set out in the CCRA. Designed to improve the resilience of the UK to climate change and changing weather, the National Adaptation Programme contains some useful advice for businesses on how to adapt to the changing climate.

Climate change represents a significant challenge for business in the UK but, for those businesses willing to take the challenge, there are some positive commercial and competitive advantages to be gained. Climate change also has the potential to seriously hamper UK businesses with supply chains stretching overseas, making the issue of building resiliency into their operations all the more important.

The CCRA identifies the main climate change challenges to businesses as flooding and coastal erosion, increased competition for water, and disruption of transport and communication links. In many cases climate change may simply lead to an increase in existing risks rather than creating new ones.

Businesses could witness a decrease in output due to an increase in supply chain disruption as a result of extreme weather, for example. Or there is also the potential loss of staff hours due to high internal building temperatures. This threat is said to be particularly relevant to the health, education and retail sectors, which have large workforces working indoors. Defra also highlighted the cascading nature of these risks, for example if floods hamper agriculture this is will also have a knock on effect on the food and beverage sectors.

On the upside, though, there could be fresh market opportunities for businesses operating in the tourism or leisure industries. Businesses may be able to exploit new opportunities for delivering products and services as part of the move to a low carbon economy.

To respond to this risk environment, Defra recommends that companies should begin to adapt now. Business leaders will want to consider how future climate and weather risks may (or may not) affect their organisation’s performance. It’s already very clear that investors, shareholders and other stakeholders are monitoring which companies do this best. As the effects of a changing climate continue to bite, climate change resiliency will increasingly become a yardstick for measuring the long-term prospects for businesses. If you think that your organisation needs to do more to adapt, now may be the time to act.

The International Energy Agency (IEA) has warned that phasing out nuclear power could result in a 6.2% rise in carbon emissions by 2035. Faith Birol, chief economist at the IEA, delivered this grim message last week at the 2012 World Future Energy Summit in Abu Dhabi. “We will see higher CO2 levels if we take out one of the major technologies that help us deal with climate change,” he said.

This comes in the wake of the Fukushima disaster in Japan, after which a number of countries, including Germany, Belgium, Switzerland and Mexico, have elected to abandon nuclear power in favour of alternative renewable energy sources. The IEA firmly believes any surges in renewable energy prompted by a move away from nuclear power would be eclipsed by a massive increase in coal use that could have disastrous consequences for the fight against climate change. Birol said the world was on track to see an increase in coal demand twice the size of Australia’s current steam coal exports and a rise in natural gas requirements equivalent to two-thirds of Russia’s current net gas exports.

This is a gloomy outlook for our beleaguered world. And, the risks and complexities in phasing out nuclear power don’t end there. Only last week, the energy wing of Siemens, estimated that phasing out nuclear power, as planned in Germany, would cost the country between 1.4 trillion euros and 1.7 trillion euros by 2030. The company believes investments in renewable energy, natural gas and other substitutes for nuclear power will go far beyond previous reckonings.

Germany – one of the first countries to announce its intention to shut down nuclear reactors and cancel plans for new nuclear sites – currently gets approximately one quarter of its electric power from nuclear sources. Despite the government’s commitment to its decision, there are German voices of dissent. Jurgen Grossman, chief executive of RWE, Germany’s second largest utility, described the policy changes as a “Herculean Task” in a speech in which he also noted he knew of no industrialized country that was “even rudimentarily able to rely on renewable energy”.

The German government says it plans to replace a 20GW in nuclear capacity by building at least 10GW in wind and solar plants and at least 10GW in highly efficient gas-fired power stations. It is this renewed dependency on fossil fuels that is seen as a backward step by the green sector. Replacing low emission nuclear power with fossil-fuel sources will inevitably stop carbon emissions from falling.

In addition to funding new sources of power, the decommissioning of nuclear power incurs a considerable amount of cost on its own. According to the Nuclear Regulatory Commission (NRC), the total cost of decommissioning a nuclear power plant can range from $280 – $612 million. In France, decommissioning the Brennilis Nuclear Power Plant, a fairly small 70MW power plant, has cost in excess of 480 million euros and is still pending after 20 years.

Only after a facility has been completely decommissioned, is it released from regulatory control, and the licensee of the plant is no longer liable for its nuclear safety. The cost and scale of any decommissioning project depends on a number of factors, including the timing and sequence of the various stages of the program, type of reactor of facility, location of the facility, radioactive waste burial costs and plans for spent fuel storage. While there are supposed to be funds in place to finance final decommissioning of any nuclear plant, in many countries, these funds are not sufficient.

It is undeniable that the Fukushima crisis accentuated the critical risks associated with nuclear reactors. But we musn’t forget that nuclear power is one of the most highly regulated technologies in the energy sector. The International Atomic Energy Agency (IAEA) has stringent checks in place to ensure compliance with its standards.

Simply scrapping nuclear power could be seen as a drastic response, when in reality, the crisis really just highlighted the need for a reassessment of the way we produce nuclear power and protect reactors.

“Many of the nuclear reactors were created in the 1970s and 1980s and the industry has seen very little innovation since then. The average age of nuclear reactors is 27 years,” says David Beer, Director of IndustryRE Sustainability. “The current amount of water needed to protect reactors will be unsustainable in the future. Water shortage is fast becoming a recurring symptom of our changing climate. We need to rethink how we harvest nuclear power and build better facilities designed to protect waste. Our innovations must be resilient to our changing and unpredictable climate and must provide long-term solutions.”

For a country like France, complete decommissioning just isn’t an option. The country gets more than 75% of its power from nuclear reactors. In fact, France has recently reaffirmed it’s commitment to nuclear energy and is resolute that modernisation is the only solution.

In December 2011, Rolls-Royce won a 250 million euro contract with AREVA to supply safety instrumentation and control technologies and systems for the French nuclear reactor modernisation programme. The systems will be installed in the twenty-strong French fleet of 1300 MW nuclear reactors operated by EDF. Rolls-Royce says the focus is on digital nuclear safety, performance and providing long-term support.

Without doubt, the implementation and progress of this project will be watched by a cautious world over the coming years.

It is entirely fitting that a recent report published by the World Economic Forum (WEF) was titled ‘More with Less’. The report comes four years after the WEF’s Sustainable Consumption initiative started. During this time, an estimated 450 million people have been lifted out of poverty, and the number of households in the emerging and developed world living on an income of more than £1,955 per annum increased by 28%. But, at a global level, this progress has come at the expense of increased resource consumption, continued environmental decline and greater social and health inequalities.

In those four years, we have lost 21 million hectares of forest, generated 9.1 billion tonnes of municipal solid waste and consumed 50 billion tonnes of fossil fuels. It is an inefficient form of economic growth and is not sustainable. The WEF warns there is an imperative for countries and companies to act to reduce the environmental consequences of consumption.

The organisation says, despite some success to date, change was now urgently required at a scale and greater pace than current initiatives, policies or strategies were likely to achieve. The report underlined the powerful role businesses had to play in expediting the world’s sustainable progress.

Economic value creation does not have to correlate with environmental degradation, particularly for businesses in emerging markets. In fact, industry thought believes sustainability is pivotal to future corporate long-term success.

Harvard Business School carried out a study comparing 90 US-based high-sustainability companies with 90 companies considered as low-sustainability. The classification was based on the adoption of environmental, social and governance policies in the 1990s that “reinforced a cultural commitment to sustainability”. This included reducing carbon emissions, green supply-chain policies, energy and water efficiency strategies, diversity and equal opportunity targets, business ethics and human rights.

The high-sustainability companies adopted 40% of these sorts of measures, while the other 90 companies only adopted 10%. And, 18 years later, they performed financially better with an annual average above-market return, that was 4.8% higher than the low-sustainability companies, had lower volatility and a better return on equity and assets. The research team believe they found conclusively that by improving their environmental and social performance, the more sustainable companies created higher long-term value for shareholders and acquired long-term investors.

“Even in times of financial gloom, we are seeing an increasing number of companies creating sustainable value and wealth with new initiatives that add value, not only to the reputation of their products, but their share price too,” says David Beer, director of IndustryRE Sustainability.

But genuine sustainable transformation takes time. Businesses must develop long-term business models. Sustainability strategies must have substance. It is not just about regular reporting or turning out the lights. Companies must focus on communicating long-term goals comprehensively. Investors and stakeholders increasingly understand the implications of these long-term goals and demand a longer term strategy of value creation.

In fact it is these long-term business models that will encourage investors to stick with businesses in the years to come. A company that is seen to be looking to the future and building strategic resilience to the changing climate and global resource shortages is much less of a risky investment. Essentially by mitigating impending risks and evolving towards a sustainable future, businesses can capture profitable opportunities.

A number of industries have driven groundbreaking initiatives forward when it comes to sustainable value creation. By realigning the way they do things to the benefit of both society and the environment, they have come up with some convincing results.

PepsiCo in rural Mexico is a great example. The company faced business constrictions on supplies of corn provided to its factories because regionally supplied products didn’t meet quality standards. The company pinned the problem down to the lack of skills among local providers, inadequate farming infrastructure and poor transportation. PepsiCo opted to help develop the low-income farmers by providing business training, technology and farming contracts. The result? They reduced their costs, improved product quality and raised the standard of living in the community.

It’s a great story to tell your consumers. And today’s consumers are not to be underestimated. They have an immense amount of power. Not providing green products or services endangers cash flow from a critical swathe of consumers who increasingly support sustainable businesses. The internet provides an incredibly fast and far-reaching platform for consumer dissent. With 750 million people on Facebook and 200 million on Twitter, companies are under the spotlight, more than ever. Unethical behaviour or apathetic efforts at sustainability will be picked up on and quickly disseminated.

In the face of the almighty consumer, businesses must understand consumer needs. But this is nothing new. Sustainable value creation doesn’t require a whole set of new capabilities. Leading businesses already have them. All businesses should be investing in innovation, creating markets and managing a complex portfolio of stakeholders. What sustainability does require is a shift in the fundamental ethos of business. “Companies must understand that they don’t have to choose between sustainability and competiveness,” says David Beer. “Competitiveness lies in a solid long-term sustainable strategy.”

It came as no surprise that Business Secretary Vince Cable named commercial and industrial waste processing and recycling as one of the five priorities for the £3bn Green Investment Bank. Other focus areas are: offshore wind; energy from waste; non-domestic energy efficiency; and supporting the government’s flagship Green Deal programme.

The initiative has been described by Cable as “a critical component in the UK’s transition to a green economy [whose] overarching objective will be to catalyse private investment, not replace.” The government believes many projects won’t get off the ground without this sort of intervention.

And undoubtedly, politicians have correctly identified responsible waste processing as key to a green economy, particularly when it comes to electronic waste (eWaste). New figures released this month suggest precious metals contained in eWaste could top £7bn over the next decade. According to a report released by Waste and Resource Action Programme (WRAP), a quarter of all electrical and electronic equipment including mobile phones and IT equipment, thrown out just by households, could be reused and generate more than £220m in the process, each year.

For example, mobile phones alone are crammed full of high-value metals. WRAP came up with some staggering statistics. Analysis found that the 22.5 million mobile phones purchased in the UK each year collectively contained 0.9 tonnes of gold, 9.4 tones of silver and 332 tonnes of copper. By 2020, UK electronic waste will total 12 million tonnes, containing around 17 tonnes of indium and going by current rates, £1bn of silver, £5bn of gold and 63 tonnes of palladium worth approximately £1bn.

As metals and other resources become increasingly scarce and we are forced to slow down extraction processes, these values are set to increase. Waste is emerging as a commodity in its own right. Combine its value with increasing disposal taxes and regulatory penalties and we’ll see the economic incentives for commercialising waste snowball.

“Disposing responsibly of eWaste is crucial to any organisation’s sustainability strategy,” says David Beer, director of IndustryRE Sustainability. “Companies must understand that it’s not just about reputational risks and the environment; it’s actually an increasingly lucrative way to do business.”

That said, the reputational risks associated with waste disposal are formidable and simply must be managed. Only this week, a report by the organisation, makeITfair, exposed the enormity of the environmental problems linked to the uncontrolled flow of e-waste from Europe to Ghana. Every month, 600 containers of second-hand electronics are dumped in Ghana. The UK, Belgium, the Netherlands, Denmark, Italy and Spain are the biggest culprits.

Electronic waste is growing three times faster than regular waste thanks to innovation and the short life of many our products. When we dump the waste in developing countries, we are dumping tonnes of hazardous substances such as lead, cadmium and mercury and exposing innocent people to pollution and health problems.

These countries just don’t have the infrastructure to deal with the hazardous waste. 40% of scrap workers employed in the informal waste industry in Ghana are children. “For a small part of the population, the import of used electronics is a lucrative business, but for a majority of the people involved in the industry, it is a matter of survival,” states the report. The workers suffer from cuts, coughs, headaches, upper respiratory problems, rashes and burns.

IndustryRE Sustainability (IRES) offers a bespoke responsible disposal and recycling service to businesses. We will adhere to the highest environmental standards and will provide certification and audit trail of every single item. We will also give you a profit share of the asset value of items that can be re-used. Items that are unable to be re-used will be smelted down into precious metals, glass, other metals and plastics, which will then be re-used in manufacturing industries or used to provide energy. All items are collected from offices and IRES will manage the entire logistics process from collection through to the final destination of your eWaste.

Next year will mark the twentieth anniversary of the UN Earth Summit, first held in Rio de Janeiro in 1992. Back then corporate reporting was only just coming onto the corporate agenda. With the anniversary in mind now is a good time to review how far the world of corporate reporting has come.

Since the early nineties an increasing number of companies have started reporting on their performance in relation to environmental, social and governance issues. Now, in a step further, some businesses are starting to understand how corporate reporting, particularly around sustainability, can actually drive innovation in their enterprises rather than simply creating value.

Put simply, this new type of integrated reporting, means discovering how better data and information can be a tool to help businesses spark new initiatives, drive change for the good, develop new insights and, more importantly, new solutions.

The idea is that these new types of integrated reporting frameworks can help inform top management, investors and other stakeholders to mould their thinking and decision-making in timely and more effective ways, according to John Elkington, executive chairman of Volans and co-founder of SustainAbility, who wrote a Guardian blog on the subject recently.
In the words of the International Integrated Reporting Committee (IIRC): “Integrated reporting demonstrates the linkages between an organisation’s strategy, governance and financial performance and the social, environmental and economic context within which it operates. By reinforcing these connections, integrated reporting can help business to take more sustainable decisions and enable investors and other stakeholders to understand how an organisation is really performing.”

The IIRC also hopes that integrated reporting will help reduce the burden of reporting on companies and actually improve the understanding of investors and stakeholders. Surely recent corporate disasters prove that both of these aims are crucial for long terms business resiliency and sustainability.

So what’s been driving these changes? The IIRC says that the main drivers include globalisations, growing concern about recent financial and governance crises, heightened expectations around corporate transparency and accountability, and the prospects for population growth, resource scarcity and environmental challenges.

In the two decades since corporate reporting first emerged, the challenge has moved onto how to make better use of the information that’s being gathered. Advocates hope that integrated reporting will unite previously isolated streams of data and bring them together to help them make more and better sustainable decisions.

So far only a handful of the world’s leading organisations have made much progress with integrated reporting. According to the IIRC current initiatives are underway with the likes of AkzoNobel, AngloAmerican, BHP Billiton and Sasol.

Meanwhile, Alain McGill, a partner in sustainability and climate chance with PricewaterhouseCoopers described the final environmental profit and loss account (EP&L) that was recently released by the sportswear company PUMA as “a great example of the sort of information that will help to present truly integrated reporting”.

PUMA published the economic valuation of the environmental impacts caused by their greenhouse gas emissions and water consumption throughout its global supply chain. Ultimately, PUMA says its reporting will include further environmental key performance indicators as well as social and economic impacts.

PUMA hopes that by identifying the significant environmental impacts it will be able to develop solutions to address these issues that minimise the business risks and environmental effects. In its own words: “PUMA’s EP&L statement provides an unprecedented and detailed level of understanding, sets a new benchmark in corporate environmental reporting and will hopefully serve as a catalyst for others to join an industry-wide engagement.”

McGill continued: “[PUMA] haven’t waited for regulations to drive this; instead they’ve developed the first – ever EP&L to by examining business risk and efficiencies, future resources and markets, and material environmental impacts. Reports like this lift the lid for consumers and business, on the chain reaction of decisions we make day to day, and give businesses the information to prioritise and act. The report represents just one company’s share of a much wider business issue – our demand for natural resources in the consumer supply chain – which slips below the radar of financial reporting currently.”

Another organisation that has taken a lead on integrated reporting is Nike. In her acceptance speech at the North American Awards for Sustainability Reporting, Hannah Jones of Nike, said: “We believe we have entered the era of climate adaptation, where we are no longer contemplating the potential, but beginning to grapple with the consequences.”

Now is the time for companies to heed these words and to start thinking about how a better appreciation of environmental data can help them to become even more innovative and competitive.

As the ever-descending cloud of economic gloom hovers menacingly over the UK, the government must not loose sight of the importance of championing a green economy. With job cuts and pay freezes gripping the public sector, the government needs to explore enterprising ways to save money with the least damage to our already faltering economy.

It is for this reason that the Carbon Trust was spot-on to urge Westminster to extend central Government’s 25% carbon target to the whole of the public sector to save more than £2bn in cost savings.

New research released last month by the Carbon Trust showed that the public sector has doubled its drive to address climate change over the past five years, despite the tough economic downturn. The trust analysed over 472 public sector bodies and found average carbon reduction targets have doubled since 2006, increasing from 16% to over 28% in 2011.

For the government, it is good news. The ambition to cut carbon emissions from the government estate by 25% by 2015 seems convincingly attainable. Furthermore, the targets have been underpinned by projects that more than pay back the initial investment, saving the taxpayer money and hopefully preserving vital jobs in worrying times of mass unemployment.

“The public sector has a vital leadership role to play in helping the UK to meet its carbon targets,” said Tim Pryce, Head of Public Sector at the Carbon Trust. “It is exciting to see leading organisations elsewhere in the public sector matching that level of ambition, and saving the taxpayer money at the same time,” he added.

The Carbon Trust did warn the savings of £2bn could only be achieved with the right direction, leadership and expert support. These sentiments are similar to those driven home to businesses in the private sector.

And it can be done. For example, the University of Bath have achieved substantial energy savings which have cut their annual electricity bill by half a million pounds. The organisation plans to further cut their emissions by an impressive 43% between 2005 and 2020. “Difficult economic times have increasingly led organisations like ours to recognise the value of cutting carbon emissions as a way of reducing our energy costs,” says Peter Phelps, the university’s energy manager.

It’s all owed to proper carbon management. In the last eight years 2500 public sector bodies cut 12 million tonnes of CO2 and saved £426 million through projects that pay back in less than five years.

As in the private sector, these savings can only be achieved if the organisation is truly committed to energy efficiency and sustainability. Often, senior management fail to recognise the cost saving potential of cutting carbon use, energy managers are often undervalued and overlooked and there is a failure to properly monitor carbon reduction and track the impact of projects, particularly those focused more on employee behaviour change.

But like the private sector again, the government recognises the potential benefits in overcoming these challenges. It has got behind the sustainability sector’s ethos: make small investments now for much larger returns in the future. Only this week, the government has announced £30m in funding designed to support energy efficiency improvements to public sector buildings and help local communities deploy renewable energy technologies. It is only right that the government give some credibility to their green rhetoric and lead the way in cost-effective green transformation within their own organisations.

Energy and Climate Change Secretary Chris Huhne said £10m would be pumped into a new Local Energy Assessment Fund (LEAF), while a further £20m would be allocated to the Salix scheme, which provides low interest loans to schools, hospitals, and public sector buildings. The money gives these organisations the financial flexibility to invest in energy efficiency projects and repay the loans through the resulting energy bill savings.

“The Government is making huge changes to the UK’s energy system,” said Climate Change Minister Greg Barker. “I want to make sure that local communities are at the heart of this energy revolution, and this funding will help make sure that can happen.”

The additional £20m of funding for the Salix loan scheme is expected to reduce public sector energy bills by up to £46m a year and cut carbon emissions by 210,000.

“Tight budgets are no longer an excuse for poor energy efficiency in the public sector,” said David Beer, director of IndustryRE Sustainability. “These loans give these organisations the capability to roll-out urgently needed green measures. However, the organisations must ensure the projects are managed effectively. True green transformation requires fundamental change at the heart of the organisation. Any energy efficiency measures must be allied with employee behaviour change, appropriate monitoring and senior level buy-in,” he added.

Incorporating sustainability into the organisation is no longer a nice to have and it is fast becoming a core strategic risk consideration. Every business irrespective of the sector, size or location will be affected and the real winners will be the companies that take a systems view of their sustainability and business impact areas. The question really is, are businesses really spotting the right signals, trends, impactand thenintegrating these risk areasinto their risk registers to gain competitive advantage?. Sustainability should be integrated into corporate strategy and made central to core business policies, practices and investment decisions.

There is also a growing need for companies to look beyond carbon and energy management when making strategic risk and opportunity assessments around sustainability. Failing to do so could restrict the agility of the business and undermine competitiveness in the long term.Sustainability is not a cost; it’s a way companies can build business resilience and competitive advantage.

The risks associated with getting access to raw material, natural resources and utilities, assets values and life, operational performance, supply partnerships, markets and your customer base could all potentially change. Businesses need to have the right risk approach to fully understand their hot spots and red flags across the organisation. But if you understand your exposures, you engage with suppliers and partners and you have the right strategy and approach you will have a far clearer picture of the risks and opportunities that will impact on your organisation right across yourcorporate value chain.

If you have a clear view of all of your cradle to cradle impacts you can put the appropriate plans in place to collaborate, grow, innovate and inspire change. Then you can build resilience and create a more sustainable business for the short, medium and long term.  These areas include;

• Having regular board meeting at which the sustainability strategy for the business is reviewed in line with their corporate goals. Including the alignment of Sustainability and corporate objectives
• The board is responsibility sustainability performance
• The business has strong corporate governance with a focus on shareholder value
• The business has sustainability as a key risk in their risk register. They also access their other key risk areas against sustainability parameters.
• Sustainability Champions exist throughout the business.
• The Head of Sustainability reports directly to the CEO or a C level position.
• Sustainability strategy has clear goals and objectives with measurable KPI’s
• They have a sustainability management system in place and they know day by day how the business is performing
• They produce a yearly Sustainability report and disclosure it through on of the voluntary reporting mechanisms (CDP, GRI).
• They comply with all government policies and regulation

Making the necessary cultural shift can also be a challenge. If your sustainability strategy doesn’t already, then it ought to reflect the needs of the business, the markets you operate in, your consumers, your stakeholders and your core business ambitions. A glossy document is no good if the business isn’t engaged with the journey, the values and the underlying plan.

Few were surprised when sustainability giant, Unilever, picked up the biggest gong, the Grand Prix Award, at this year’s International Green Awards at the Natural History Museum in London. Soaked in shafts of green light, the great hall of the museum was bustling with green glamour and passionately eco folk vying for the ultimate recognition in sustainability circles.

As winner of this award, Unilever, convinced the judges that of all the entries, it had made the best tracks in sustainability and, say the Green Awards, “had the greatest capacity to change the way society and business is perceived, supported by factual evidence of systemic change.”

The award carries clout in the industry and has been won in the past by a number of other illustrious sustainability champs including Nokia, Honda, O2, China Environmental Protection Foundation and Keep Britain Tidy.

Unilever are, without question, worthy winners. The sheer scale of the company’s green ambitions have pushed the sustainability sector to dizzying new heights of innovation and change. Routed firmly in the belief that businesses must contribute to a sustainable future, it is leveraging a wider change in business philosophy that is unprecedented. Paul Polman, CEO of Unilever says: “Most businesses operate and say how can I use society and the environment to be successful? We are saying the opposite – how can we contribute to the society and the environment to be successful?”

The company says by 2020, it will have halved the environmental footprint of its products, helped more than 1 billion people take action to improve their health and well-being, and sourced 100% of the agricultural raw materials sustainably. It’s impressive stuff.

On winning the award, Karen Hamilton, Vice President of Sustainability at Unilever said: “We’re delighted to be awarded the International Green Awards Grand Prix by the influential jury of sustainability experts and luminaries. We are making solid progress towards these goals and the International Green Awards are an important recognition of those efforts.”

The judges said: “Unilever’s ‘Sustainable Living Plan’ reflects the most comprehensive value chain approach with ambitious goals and genuine ethos for sustainability.”

And, for those non-believers who still fail to see how fully embedded sustainability can equate to commercial growth and future resilience, Unilever’s profits are on the up. A year on, despite the difficult economic times, it announced some formidably strong financial results that surpassed many of its competitors. To put it simply, Unilever embrace a truth that others need to face up to: business must prepare itself for a future of reduced, more expensive resources.

A facet of sustainability often overlooked by business is the importance of behaviour change among employees. It is crucial to a sincere and comprehensive shift towards sustainability. HSBC won the gold award in the ‘Best Green Employee Engagement Strategy’ category at the International Green Awards.

This recognition was the fruit of a five year partnership with Earthwatch which has seen more than 62,000 employee volunteers participate in environmental projects in their community, 2,223 climate champions spend time at five Earthwatch regional climate centres and the creation of a global ‘green taskforce’ of employees, with 96% of climate champions agreeing that the programme increased their knowledge of climate change.

The achievements of all the winners were a testament to the humbling commitment and innovation to a greener world taking place in the business community. From multi-national corporate companies to small thriving enterprises, green talent was celebrated across the world. From a project protecting lakes in India to a Danish campaign for greener driving, the Green Awards painted an encouraging picture of global engagement and development with the green agenda.

But, there is still so much more to do. And this message was most poignantly driven home by this year’s Lifetime Achievement Award. Awarded last year to David Attenborough, it was awarded this year posthumously to the great Kenyan environmental leader Wangari Maathai, who sadly recently passed away.  The first African woman to receive the Nobel Peace Prize, Wangari founded the Green Belt Movement, an environmental non-governmental organisation focused on the planting of trees, environmental conservation and women’s rights.

She fought passionately and eloquently for a more sustainable world. “In wealthy countries, the looming climate crisis is a matter of concern, as it will affect both the wellbeing of economies and people’s lives,” she said. “In Africa, however, a region that has hardly contributed to climate change, its greenhouse gas emissions are negligible when compared with the industrialised worlds; it will be a matter of life and death.”

Her candid words are becoming uncomfortably prophetic. For those companies who are striding out ahead, learning, innovating and changing, the International Green Awards is a fitting recognition of their efforts. For those still lingering behind, let’s hope the winners finally inspire them to build a more sustainable future for business and the world as a whole.

The full list of winners and categories are available on the Green Awards website.

IndustryRE is proud to sponsor the International Green Awards.

By Verity Hambrook, Industry RE, Nov 2011 Tweet
Amid severe shortages, the region now has a change to pioneer energy-efficient water-producing technologies and lead the way in clean technology. 

In stark contrast to the current supply of fossil fuels and energy resources, the oil-rich member countries of the Gulf Co-operation Council(GCC) – Qatar, the UAE, Kuwait, Bahrain, Saudi Arabia and Oman –  are becoming increasingly concerned by a growing shortage of vital resources, in particular water and food. These serious issues are only exacerbated by the deepening side-effects of climate change and a rapidly growing population, which is expected to increase by 30% to 53.5m by 2020.

In a recent Water Stress Index, released by risk analysis and mapping firm Maplecroft, Gulf nations including Qatar, Kuwait and Saudi Arabia, were rated as the world’s most water-stressed countries, with the least available water per capital, out of 186 countries.

Industrial demand for water in these countries will only rise as attempts to extract diminishing fossil fuels intensify. “Before the world’s fossil fuels are finally exhausted, it is likely that their extraction will require an unimaginable amount of water,” says Gerard Velter, general manager of Veolia Water for Africa, Middle East and India, noting that the ratio of water required per barrel of oil or cubic foot of gas is increasing.

In the region, there is need and scope, to carve out more water-efficient economies. Currently, significant inefficiencies exist along the length of the production, distribution and consumptions chains.

Increasingly dependent on imports, prices for food are soaring for the Gulf and a key challenge in the coming years is the successful management of energy, water and food resources to maintain sustainable growth in the long-term. The countries are devising plans to secure a healthier future but many of these solutions bring further challenges. For these countries to remain profitable in a changing world, investment in alternative energy, water and food production is essential. Businesses wanting to sustain healthy growth and adapt to the growing risks of climate change can learn a great deal from the challenges the Gulf faces and the solutions these countries are beginning to invest in.

Qatar recently announced a drive to achieve food sustainability and move away from a dependency on foreign import. The government’s National Food Security Program (QNFSP) will start by turning 45,000 hectares of its own land into farms. Currently, Qatar – which has a population of 1.8 million – can only produce 10% of its food needs and imports $1.3 billion in food annually. 1.6% of Qatar is arable land and agriculture only contributes to 0.1% to the country’s GNP. Farms in existence are only able to work to 10% of their capacity owing to a shortage of water and qualified staff. The new program will be ready by 2013, with the aim of achieving food security in a decade.

To meet this target, Qatar will need to overcome a number of obstacles. Most of the Qatari peninsula is a particularly barren and uncultivable swathe of land. Agriculture on dry land is feasible but requires the harnessing of new technologies, high-level strategic planning, international collaboration and invariably, expense.

Desalination, increased use of fertiliser and hydroponically grown plants are all options. Currently, there are plans to use solar energy to desalinate sea water for agricultural use.

However, the increasing salinity of water in Qatar and other countries in the Gulf is a growing concern, especially as Gulf water is already highly saline because of the high evaporation rate in the hot climate. This makes desalination more difficult, more expensive and more energy inefficient.

Devising ways to desalinate using clean technology will be a huge leap forward for the Middle East, given that solar energy and seawater are abundant. For example, it would be possible to pump seawater into underground storage in the desert and kick-start the desalination process by filtering the water through the sand to remove much of the salt before taking it into a desalination plant. Speaking at a recent workshop on water, energy and food security at Texas University, Fahad Al Attiya, Head of QNFSP, said: “We are working to develop research and development centres, educational facilities and providing advanced techniques enabling Qatar to diversify national economy while conserving natural resources to achieve food security. The programme is working on research to use solar energy to desalinate sea water for use in agricultural production.”

While solar desalination is viable, currently the process requires vast amounts of solar energy. Technologies are being developed to reduce the pressure in water reservoirs with a vacuum pump, which in turn would vastly reduce the amount of energy required for desalination.

Progress in the Middle East will provide learning lessons for the world. The GCC has long been a key trading centre and businesses with investments in the region need to be realistic about the grave water-related risks that will only intensify over the coming years. Wasteful uses of water must be avoided and while the future may appear bleak, the crisis does present opportunities to develop water-producing technologies and industries, including new and more energy-efficient desalination technologies. For the world, this could be a transformative and even lifesaving step to a brighter future.