Business and Finance
More Than Money: Put People And The Planet Alongside Profits
by Richard Branson – Founder, Virgin Group
LONDON — Ever since I took my first steps as an entrepreneur more than four decades ago, I have been motivated by the question of what business can do to make people’s lives better. Coming up with an answer isn’t always easy, and for most entrepreneurs, success follows a good amount of trial, error, and failure. One important source of inspiration is to look ahead at this world a decade or two from now. What kind of future do we envisage and what kind of products and services would we like to see? What are the roadblocks along the way?
As it turns out, our planet faces a broad range of enormous challenges. How can we feed an ever-growing global population? What can be done to lift the world’s poor, still well over a billion people, to a higher standard of living and a better life? How can we turn the tide on climate change? And will we ever manage to overcome our divisions and put an end to violent conflict, from Syria to the Congo?
On a closer look, I feel that most of the big issues of our day are connected in some way or the other; and more often than not, they point to far greater systemic challenges. One of these is the way we have been treating our beautiful planet, destroying vulnerable ecosystems, wiping out biodiversity and depleting many of our ultimately limited natural assets. For instance, it doesn’t require much wisdom to see the straight line that leads from a warming planet to desertification and soil erosion, to water stress and scarcity, and on to massive migration and abject poverty. Likewise, our insatiable appetite for fossil fuels has fueled unrest and armed conflict around the world.
It’s a vicious cycle, indeed. And it has been a major focus of my own advocacy over the last decades. But as much as I appreciate the seriousness of the situation, I don’t dwell on gloom and doom. Challenges exist to be tackled head-on. I’d like to look at this web of interdependencies as a huge opportunity to drive progress and positive change — through sensible policy, for sure, but especially through innovation and smart investments. As so often, entrepreneurs have a major role to play. The good news is that many are doing it already and at greater scale than ever before. It is one of the reasons why, last June, we launched the B Team, a global group of business leaders which aims to deliver a new way of doing business that prioritizes people and planet alongside profit — a “Plan B” for businesses the world over.
Zooming in a little, one of the big questions in the coming years is how we can ensure access to safe, clean and sustainable energy for our and future generations. Access to energy is a foundation of ensuring sustainable lives for 7 billion people, and despite the huge size and incumbent nature of the energy sector, there is lots of room for improvement.
First and foremost, I see a huge amount of opportunity to use energy more efficiently than we currently are. This applies to more efficient cars and aircraft as much as it does to electronic devices. And it’s of particular importance when it comes to buildings. As a recent report by the Carbon War Room pointed out, buildings are responsible for 40% of the total energy consumed globally, and one third of the world’s carbon emissions. Not only is there a huge potential to reduce these emissions globally through greater energy efficiency (the equivalent of over 1.1 billion tons of CO2), but the financial savings of reduced energy use can be equally monumental: to the order of trillions of dollars globally.
Second, new and disruptive energy technologies (from advanced renewable fuels, to electric cars that leave their petrol-powered rivals behind, to more efficient, lower-cost solar cells and intelligent ways of heating and cooling buildings) need adequate financial backing. Many investors are still reluctant to grapple with what they see as risky early-stage concepts. But I am convinced that some of these innovations and concepts will succeed, and organizations like the Carbon War Room are already helping to get billion-dollar markets off the ground that could save billions of tons of carbon emissions. The challenge is for investors to create scenarios where they can back these sorts of efforts without throwing too much money down the drain. The MIT Technology Review recently pointed out that, in the US, private foundations can count investments in start-ups as charitable grants – even if they go on to deliver massive returns. The catch is that the start-ups have to clearly be too risky for normal investors, and have to clearly serve a philanthropic role. But ways need to be found to ensure that resources go into the right ideas from the right places.
This also means that the world needs to start a conversation about energy subsidies. Sceptics frequently argue that low-carbon renewable energy costs more than conventional fossil energy. However, as the International Monetary Fund pointed out back in March 2013, global energy subsidies are estimated to total about $1.9 trillion worldwide, or about 2.5% of global GDP. If these energy tax subsidies around the world were eliminated, global CO2 emissions could be reduced by over 4 billion tons (or 13%). For comparison, the whole world invested $244 billion into renewable energy in 2012; it would have likely been more, were it not for the unstable and uncertain subsidies and policies for renewables.
To be sure, each of these challenges for the energy sector still represents a huge mountain to climb. But the relentless optimist in me likes to think that the “clean revolution” is not a choice between saving our planet and growing our businesses. Both are two sides of the same coin. With the right mix of innovation, investment and sensible regulation, I see success well within reach.
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