"Green transformation": How companies can use "Sustainable Business" to profit from megatrends like climate change, Roland Berger Strategy Consultants
Release Date: 2010-08-23
Climate change and scarce resources are imposing new constraints on companies and business worldwide;"Sustainable business": customers, investors and governments are forcing companies to adopt more sustainable business strategies;
Europe, with Germany out in front, is well equipped for this green transformation, and leads in areas such as energy efficiency and renewable energies;
Responding intelligently to climate change and scarce resources provides competitive advantages;
"Sustainable business" can only be achieved through a sustainable process of transformation.
Climate change and scarce resources are changing the framework of the global economy drastically. But, if companies can position themselves well and make their business strategies sustainable in good time, these megatrends are not just risks, but also huge opportunities. In his study "Success through Green Transformation" in the rethink:CEO series, Roland Berger Partner Dr. Torsten Henzelmann looks at how European and German companies need to position themselves to be prepared for developments such as climate change and scarce resources, and draw competitive benefits from them. His conclusion is, the challenge of green transformation lies in focusing all innovation management on the megatrends.
Sustainable business is not, say, a "green cream topping" to be used in cultivating one's image, but is at the heart of sustainable corporate management. Green transformation must be at the top of management's agenda.
"Climate change and scarce resources are putting new constraints on companies and economies worldwide," says Dr. Torsten Henzelmann, Partner at Roland Berger Strategy Consultants and Professor of Sustainable Business at Trier University of Applied Sciences. "So shareholders, executives and management are well advised to look at how these megatrends affect their companies' business models and integrate them into their long-term strategic plans."
Climate change and scarce resources are also leading stakeholders to rethink their ideas, because they considerably affect their expectations and needs. The general public is increasingly calling for companies to take responsibility. For customers, sustainable action is becoming a major yardstick by which they assess companies and their products.
Events such as the oil disaster in the Gulf of Mexico show that it is high time for an energy policy that focuses on efficient and renewable energies. Many promising starts are being made towards this in Germany and Europe: but business needs to commit itself and invest likewise. That doesn't just benefit the environment, but is also fundamentally in the interests of business itself: soaring energy prices are pushing costs, and can only be held back by energy efficiency. The economic impact of climate change and scarce resources is not negative for companies per se: while it does harbor some major risks, it also offers some new opportunities.
Companies can seize these opportunities to succeed. The best way of doing this is to create "sustainable business". This integrates environment, social responsibility and economics as part of a company's overall strategy and processes. "This holistic approach is more than just cobbling ideas together or polishing one's image superficially: the concept requires analyzing a company and its environment comprehensively," says Henzelmann. "Essentially, it's about identifying and assessing the risks and opportunities the megatrends of climate change and scarce resources are creating all along the value chain." This analysis provides the basis for individual green transformation strategies. "This means looking systematically and critically at what exists and initiating a thorough process of change that will result in new standards at all levels and in all business units," says Henzelmann.
A number of things are necessary for this tour de force to succeed: top management commitment, clear goals and motivated staff.
If we are to keep global warming below the two degrees Centigrade limit, we need to cut greenhouse gas emissions drastically worldwide. "Global carbon emissions must not exceed the maximum of 750 billion tons by 2050: otherwise, the risks to the eco-system is incalculable," Henzelmann says. "The timeframe available in which to avert the worst case scenario of temperatures rising too high is shrinking. The longer we wait to start reducing emissions significantly, the harder it will be to achieve the targets required."
| Type: | NORMAL |
| Company: | Roland Berger Strategy Consultants |
| Country: | Germany |