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Climate change and the global green economy: New forms of business leadership needed

Posted by Harry Verhaar in A Simple Switch on Dec 5, 2011 6:38:04 PM 996 Views

On the afternoon of December 4th, the CEO of Philips Africa, JJ van Dongen, spoke at the World Climate Summit’s panel, “The road to Rio+20: Business Leadership driving change.”  The panel's subtitle was: ‘Tackling climate change and building the global green economy will require new forms of leadership. Collaborations across sectors and among business, government, and civil society will prove essential’.


The panel was organized by ‘The Prince of Wales’s Corporate Leadership Group on Climate Change’, moderated by Sandrine Dixson-Decleve (Director PoW CLG on CC).  Other panelists included a.o.: Connie Hedegaard (EU Commissioner for Climate Change), Rachel Kyte (Vice-President World Bank), Paul Simpson (CEO Carbon Disclosure Project), and Tine Roed (Confederation of Danish Industries).


JJ van Dongen described how we as Philips have transformed from an electronics to a health and well-being brand. In parallel we see the sustainable development agenda that is the subject of the Rio+20 agenda moving to the core of our businesses. Particularly in Africa, we are confronted with growing resource-efficiency challenges in the areas of energy, (raw) materials, food and water. These challenges are driven by global population rise, urbanization and the growth of the middle class in emerging and developing countries. At Philips we are therefore focusing on creating and expanding a portfolio of innovative solutions that matter to people’s quality of life.


Energy-efficient lighting - and the tipping point we are crossing in the LED revolution - is one area, where for Africa, the emergence of solar-LED lighting represents a leap-frog into the 21st century for cities and rural areas.


On materials, we need to move to closed-loop business models: For example, in lighting we are collaborating with the industry sector as well as with UNEP on a program [the en.lighten project] to switch to energy efficient solutions including a focus on recycling. We have created a factory for energy-saving lamps in Lesotho, and have just launched the largest LED retrofit initiative with Eskom. Furthermore, we are moving from a product- to a service-based business model approach, e.g. for street-lighting in cities. This will have both ecological as well as economic benefits.


In the area of food we are focusing on preparation of healthy and nutritious food, as well as value propositions through horticulture lighting that can support improvements in food productivity.


The last resource – water – is where we are exploring water purification with ultraviolet light. Throughout these resource efficiency challenges we see a cross-cutting healthcare angle, with evolving solutions and business models for affordable and accessible healthcare.


There are a number of levers to create momentum, varying from having technology and solutions available based on local insights, supported by adequate policy frameworks and financing mechanisms. Added to these elements we are working intensively on the fourth lever – one might say the missing link in the global sustainable development process – and that is communication: Moving away from a global generic threats-based communication, to one centered around individual tangible benefits.


In that sense we see a comprehensive and integral sustainable development approach that is in effect a very positive agenda driving green growth across the African continent.


In particular Rachel Kyte from the World Bank referenced the growing energy efficiency market, with fast growth for solar-LED lighting solutions (with mobile phone chargers) that are improving people’s livelihood in Kenya and other countries.


Other speakers highlighted the relevance of new types of partnerships, development of replicable business models, public-private financing, and involvement of the business side in addressing solutions to climate change and the emerging broader scope of resource efficiency challenges that the growing global population is confronted with.


In the coming years we will see which companies are going to emerge as the winners or losers in this process. Work will progress in these areas - where many solutions make good sound business sense - on the road to the Rio+20 summit [the Rio+20 summit takes place on 21-22 June 2012 in Rio de Janeiro].


Connie Hedegaard made a strong plea for leading businesses to have their voices heard and their cases been seen, as still some other companies are trying to protect a ‘Business as usual’ approach, which in the end will only have losers. Those that lead can help multiply best practices and mainstream sustainable solutions that make sense for companies like Philips as well as other companies. That would make sense and would be a great outcome of Rio+20.


Rachel Kyte added that while ‘northern economies’ are being hurt economically, the people in emerging and developing economies do not want to wait for solutions that bring services they urgently need: access to energy, access to water and solutions for cities. This is where the public and private sector can work together along with financing organizations (like the WB) to support innovation that matter.


The panel summarized by highlighting the relevance of policy frameworks, innovative financing; local industrial business initiatives and the development of business cases. JJ van Dongen closed the panel by saying that at Philips we focus on the 500 million people that have no access to energy, where we will develop new, unusual partnerships to create markets and development pathways for African citizens and businesses.


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