Content by THE BUZZ BUSINESS

As the 46th annual meeting

of the World Economic

Forum gets under way in

Davos, participants are facing up

to some of the most challenging

economic and social conditions

in a generation. The dramatic

slowdown in the global economy,

combined with widespread

political unrest and with existential

concerns about the environment,

is for many delegates compelling

evidence that the growth model of

recent years has been exhausted.

The task at hand now is to develop

a new way ahead, a new model that

harnesses the power of technology

and innovation to deliver global

economic growth that is both more

inclusive and more sustainable.

“The new technology age, if

we shape it and contribute to it

in a responsive and responsible

way, can catalyze a new cultural

improve the quality of life in the

world’s fast-growing cities. Giant

mining multinationals, faced with a

continued downturn in commodity

prices, are transforming into

long-term partners for national

and regional development. In

the financial services sector,

telecommunications companies,

banks and exchanges are

developing new ways of accessing

the unbanked and mobilizing

capital for sustainable investments.

Meanwhile, policymakers are

working hard to ensure that new

regional trade and investment

agreements raise the bar for

environmental protection and

employee rights worldwide.

Just as coal and steam powered

the first industrial revolution, it is

communications technology that

is fueling today’s transformation.

Networking giant Cisco estimates

that IoE, the networked connection

of people, processes, data and

things, represents an opportunity

to generate $19 trillion of value

in the private and public sectors.

Chris White, the company’s

senior vice president of IoE, says

that partnerships between both

sides will be the key to unlocking

this value. “Digitalization and

technology are not just issues

for technocrats,” he says. “They

should be on everyone’s agenda.

Companies and public-sector

organizations need to think about

forming new partnerships to drive

transformation forward.”

As the WEF begins, a consensus

is already emerging among

participants: The time for action

is now. Technological and social

change is happening so quickly that

today’s mechanisms for governance

and growth are already looking

outdated. “My main worry is that

people aren’t taking advantage of

the opportunities of innovation

fast enough,” White says. “We need

to look at what we can today and

accelerate what we are doing, if we

are to successfully transform our

businesses, cities, countries and

our entire society.”

renaissance that will enable us

to feel a part of something much

larger than ourselves—a true

global civilization,” Klaus Schwab,

founder and executive chairman

of the WEF, said last year.

The theme of this year’s event

is Mastering the Fourth Industrial

Revolution. The technologies

needed to deliver a new economic

growth model are essentially

ready, ranging from the Internet of

Everything (IoE) and digital money

to alternative fuels, 3-D printing,

nanotechnology, robotics and even

artificial intelligence. The challenge

now is to use these innovations

to transform today’s systems of

production and consumption,

while at the same time delivering

growth that creates employment,

increases social inclusion and

rewards investment.

As this report illustrates, some of

the world’s leading businesses are

already rising to this challenge in a

variety of industries. Manufacturers

of cars and trucks are not only

evolving toward alternative fuels

but also using Internet technologies

to position themselves as providers

of integrated mobility services,

working with governments to

GLOBAL LEADERS IN SUSTAINABLE INNOVATION

Innovation is the most important and only sustainable source of economic growth for companies and countries.” Klaus Schwab, Founder and Executive Chairman, WEF

People need to realize not only that the paradigm has changed, but that they have to do something about it.” Chris White, Senior Vice President of IoE, Cisco

Content by THE BUZZ BUSINESS

2

It has been a year of unprece-

dented change in the world’s

automotive industry. Increasing

public concern over car emissions,

combined with advances in

technologies for batteries and

alternative fuels, has led to a

rapid growth in the market for

low-emission vehicles. At the

same time, car manufacturers and

governments have been radically

rethinking today’s model of

car ownership and are working

toward a more sustainable vision

of urban mobility.

Some of the world’s most

sophisticated economies are

pioneering the revolution. In

Norway last year, over one-fifth of

new car sales were electric vehicles

(EVs). Cities across Germany are

providing parking privileges for

shared vehicles. In the run-up

to the Olympic Games of 2020,

Japan will spend over $300 million

on infrastructure for hydrogen-

powered cars. In all three countries,

carmakers are partnering closely

with governments to ensure that

the infrastructure and incentives

are in place to support the transition

to a new generation of vehicles and

a new model of mobility.

“Governments understand that

in the early stages they need to

prime the pump with incentives

for consumers in order to grow

the electric vehicle market,” says

Thierry Bolloré, chief competitive

officer of Groupe Renault, which

in 2015, together with Alliance

Member States will have to have

built enough infrastructure to

ensure that EVs can circulate at

will in cities and suburbs, with

ideally one recharging point per

10 EVs on the roads.

At the top end of the EV market

in Europe, the star performer is

BMW’s i3 model. In Germany, one

in every four EVs sold in the last

two years has been a BMW i3, and

the model is the third most popular

EV in the world. With the i3, BMW

is also pioneering innovative

services that are designed to make

urban driving more sustainable.

In September, the company’s

DriveNow car-sharing service put

a fleet of 400 i3s into service in the

Danish capital of Copenhagen. By

reducing the numbers of cars on

the roads, and ideally replacing

them with EVs, car-sharing

schemes such as DriveNow can

both improve urban mobility and

reduce pollution. Carl Friedrich

Eckhardt, head of BMW’s Center

of Urban Mobility Competence

in Munich, estimates that 50,000

car-sharing vehicles could do

the job of 500,000 individually

owned cars in the German capital,

reducing traffic and freeing up city

parking space for new uses by city

dwellers. BMW set up the center

in early 2015, specifically to help

create a sustainable model for

urban mobility and improve the

quality of life in cities.

At the Renault-Nissan Alliance,

Bolloré says that new engine

technologies, regulations and

software connectivity are now

steering the automotive industry

toward a radically different

business model, in which car

manufacturers sell sustainable

mobility services rather than just

cars. “Mobility is going to become

something very different to what

it is today,” he forecasts. “In the

future, people won’t necessarily

only be buying cars from us—they

will be buying mobility services.”

These services are already

available in some markets. In

Copenhagen, BMW has now

linked the electric i3’s navigation

software to the city’s public

transport system, so that it

informs drivers in real time on the

best way to complete their trip and

on the intermodal connections

they can make. “The system can

tell you when there is congestion

and can recommend alternatives

with public transit,” Eckhardt

says. “A whole new world of urban

driving is possible when you link

up cars and public transport. Our

vision is to export our car-sharing

ideas and mobility services to as

many cities as possible and at an

ever greater scale.”

partner Nissan, sold its 280,000th

EV, accounting for half of all EVs on

the roads. Nissan LEAF, the world’s

best-selling EV, accounted for the

majority of the sales. “At the same

time, governments worldwide

are setting increasingly stringent

standards for emmissions,” Bolloré

continues. “As a result, the EV

market may be still small, but it’s

growing very fast, by around 50%

in 2015. It’s only going to go in

one direction—and before long

the market will be so large that

incentives won’t be needed.”

At the COP21 climate

conference in Paris, the Renault-

Nissan Alliance provided a fleet

of 200 electric cars of various

types and sizes, the largest electric

vehicle fleet ever assembled.

The Alliance is currently focused

on improving the distance that

EVs can travel before needing to

recharge, hence eliminating the

so-called ‘range anxiety’ of EV

drivers. “We believe that by no

later than 2020, our EVs will have

double the range they have today,”

Bolloré says. “We want range

anxiety to disappear completely.”

The key to increasing the

range of zero emission cars lies in

improving the performance of their

batteries, but without increasing

the weight of the vehicles. The

Alliance is currently developing

new battery technologies with

its suppliers that will not only

increase the range of its EVs, but

will also make recharging the

battery a much quicker process. At

the same time, public authorities

are increasing their investments

in charging points. By 2020, E.U.

Thierry Bolloré, CCO, Groupe Renault, with France’s most popular EV, the Renault Zoe

SUSTAINABLE MOBILITY: IS THE FUTURE ELECTRIC?

DriveNow: BMW’s car-sharing service

We are investing billions of euros to offer the widest range of EVs in the market.”Thierry Bolloré, CCO, Groupe Renault

PROJECT DIRECTION: SIAN GODDARDINTERVIEWS: SIAN GODDARD WRITING: MARK BERESFORD

EDITING: CARMEN MOURAILLUSTRATIONS: VASAVA DESIGN: ANTONIO CAPARRÓS

Produced by for

MOBILITY

Content by THE BUZZ BUSINESS

In the development of

sustainable urban transport,

partnerships between vehicle

manufacturers, energy suppliers,

academia and local authorities

are playing a fundamental role.

Thanks to cooperation across

industry, research institutions

and the public sector under the

ElectriCity initiative in Sweden,

last year the city of Gothenburg

began operating its very first

route for electric bus-

es, supplied by the

Volvo Group. For

city residents,

the transforma-

tion of Line

55 has re-

sulted in less

noise, lower emissions, and

state-of-the-art bus stops and

vehicles. For Volvo, the city is

serving as a testing ground for

its sustainable transport initi-

atives. “We created ElectriCity

because we want to focus

not just on the buses but on

the total transport solution.

We might make the cleanest

buses, but to respond to the

public transport challenge ef-

fectively we need partners,”

Volvo Group’s chief sustaina-

bility officer Niklas Gustafsson

says. In the capital, Stockholm,

Volvo is also partnering

with electricity supplier

Vattenfall to provide

rapid charging

points for its bus-

es. “There is great

potential to make

energy savings by

working together on sustainable

transport projects,” Vattenfall

president and CEO Magnus

Hall says.

4

IS THE HYDROGEN FUEL CELL THETURNING POINT?

Electric cars are not the only

alternative to the internal

combustion engine that are under

development. In 2015, Japanese

car giant Toyota began selling in

Europe and California its Mirai

automobile, a futuristic vehicle

that uses a hydrogen fuel cell for

power and emits only water vapor

from the tailpipe as a byproduct.

The launch of Mirai forms part

of Toyota’s long-term strategy of

IMPROVE YOUR BOARDROOM EFFECTIVENESS

IESE and Harvard Business Schools have joined forces to offer a unique program aimed at accelerating the effectiveness of corporate boards. In a dynamic learning context, “Value Creation Through Effective Boards” will convene high-level executives and leading-edge academics to examine the fundamentals of business strategy, crisis management, the impact of the regulatory environment, and key insights that will boost board engagement and drive business value.

www.iese.edu/boardIESE: BARCELONA · MADRID · MUNICH · NEW YORK · SAO PAULO

Executive EducationVALUE CREATION THROUGH EFFECTIVE BOARDSIESE Campus Barcelona, 23rd–26th May, 2016 Contact: Idunn Jónsdóttir, ijonsdottir@iese.edu

VOLVO’S ElEctricity

Toyota is a global player with the financial capability to invest in researching different types of energy.” Jacques Pieraerts, VP Communication, External and Environmental Affairs, Toyota Motor Europe

MOBILITY

Toyota has put together a broad

coalition of partners from

the public and private sectors,

who all share a common interest

in building what the

company calls the

hydrogen society.

In Europe,

Toyota launched

the Mirai in the German

city of Hamburg, which is already

home to four hydrogen refueling

stations and which produces

hydrogen using wind power. In

California, the state government

is investing $200 million to

build a network of over 100

stations. Toyota itself has also

released thousands of its fuel cell

patents free of charge to speed

up adoption of the technology.

“With global population growth

as fast as it is and with increasing

demands for mobility and energy,

we cannot continue with business

as usual,” Pieraerts says. “It is time

for revolution, not evolution.”

vehicles, and you can refuel very

quickly,” says Jacques Pieraerts,

vice president of communication,

external and environmental

affairs at Toyota Motor Europe.

While Toyota believes that there

will be a place in the market for

EVs, especially for short trips and

for urban car-sharing schemes,

it thinks fuel cell vehicles will

be more appropriate for longer

journeys. By 2020, the company

aims to be selling 30,000 Mirais a

year, up from 2,000 in 2016.

One challenge that hydrogen

fuel cell vehicles face in common

with EVs is the still limited

scope of public infrastructure for

alternative fuels and recharging.

To respond to this challenge,

eliminating nearly all petrol and

diesel engines from its output

by 2050. It is the latest result

of a long-standing commitment

to sustainability that saw the

company launch the Prius,

the first mass-produced

hybrid, back in 1997.

In Toyota’s latest world

first, the Mirai, the engine

combines hydrogen with oxygen

to produce electricity. As the

technology does not rely on

a battery, it avoids the range

anxiety problems faced by

today’s generation of EVs; in

effect, the hydrogen itself serves

as an energy storage device.

Furthermore, the time taken

to refuel with hydrogen is only

three to five minutes, comparable

with conventional cars, whereas

many EVs still require overnight

charging. “With the Mirai,

drivers have autonomy of

around 500 kilometers, which

is still a challenge for electric

Content by THE BUZZ BUSINESS

5

CNH INDUSTRIAL TRAILBLAZES IN INNOVATION

While the high-performance

road vehicles of global

brands such as Nissan, Renault

and Toyota may be the most visible

face of the fuels revolution, it is

in the world of agricultural and

industrial equipment that change

is taking place at the fastest rate.

“The lion’s share of our capital

spending is now going toward

improving the environmental

performance of our engines

the Israeli government.

As with the EVs and

hydrogen fuel cell

markets, Tobin

says that the en-

gine technology

is now ready; what

is needed is for governments and

energy companies to fund the fuel

stations and infrastructure required.

The company is also investing

in the development of biomethane

as a fuel. Biomethane is produced

from biogas, which is created

naturally when bacteria break down

organic matter and animal waste.

According to CNH Industrial, a

vehicle powered by biomethane

produces CO2 emissions

that are comparable

to those of an electric

vehicle fueled using

energy produced from

renewable sources. The

company’s Iveco Bus brand

already manufactures a range

of vehicles that run on natural

gas and can also be fueled using

biomethane. For farmers, there is an

additional incentive: With the right

refining equipment in place, farms

should be able to produce their own

biomethane from organic waste

and then use it as a fuel to power

their tractors and other agricultural

equipment—in other words,

become energy-independent farms.

“In a way, we are going full circle

from having horse-drawn carts

back to vehicles which are fueled

by biomass,” Tobin says. “A large

farm could theoretically have the

ability to supply all of its own fuel

through biogas, biomethane and

renewables.”

and developing technologies

for alternative propulsion and

precision farming,” says Richard

Tobin, chief executive officer of

CNH Industrial, the sector leader

in the Dow Jones Sustainability

World and Europe indices, which

owns brands such as New Holland

Agriculture, Case IH and Iveco.

For heavy-duty trucks that oper-

ate in these segments, electrification

is not a feasible option; the weight of

the batteries needed to power them

would make them impractical.

Instead, manufacturers are devel-

oping engines that run on natural

gas as a low-polluting alternative to

diesel. To date, CNH Industrial has

already produced around 14,000

commercial vehicles powered by ei-

ther compressed natural gas (CNG)

or liquefied natural gas (LNG),

ranging from light-duty vans to

medium-and heavy-duty trucks. In

July last year, the company deliv-

ered Israel’s first-ever natural gas ve-

hicle, as part of its partnership with

It is set to be a critical year for

the world’s commercial aviation

sector. By the end of 2016, the

International Civil Aviation

Organization (ICAO), a UN

agency, will endorse a global

standard for CO2 that all new

aircraft will have to meet.

This year,

the ICAO

will also

approve the

industry’s first worldwide

carbon-offsetting scheme. “All of

the new regulatory frameworks

are going towards reducing

emissions and potentially

imposing higher costs for

emitting carbon,” Julie Felgar,

head of environmental strategy

at Boeing Commercial Airplanes,

says. “The aviation industry has

to respond to that reality.” In

the long term, by investing in

new aircraft technologies, better

fuel efficiency and enhanced

in-flight operating procedures,

the sector aspires to cut its net

CO2 emissions to half of its 2005

levels by 2050. Meanwhile,

the focus on environmental

issues is also reducing aircraft

noise; the

new C Series

model from

Bombardier,

coming into

service this year, is the quietest

in its class. “Nearly the

same things that contribute

to reducing aircraft emissions

also reduce noise,” says

Bruce Parry, the company’s

head of sustainability, product

development engineering. “It

is one of the advantages of

developing a completely new,

clean-sheet design.”

GREENER SKIES

As an industry leader, we are obligated to be at the front of the sustainability curve. Our clients expect it.” Richard Tobin, CEO, CNH Industrial

MOBILITY 5MOBILITY

At Glencore, our commitment to sustainability supports our long-term ambitions.

Discover more: glencore.com/sustainability

MINING IS A LONG-TERM

BUSINESS

019751_Glencore_Time_Magazine_Advert.indd 1 27/11/2015 12:51

Richard Tobin, CEO, CNH Industrial

6

Content by THE BUZZ BUSINESS

MONEY MAKES THE WORLD GO ROUND

Credit Suisse supports financial education for girls

M-Pesa mobile services connect the unbanked masses to the global economy

into protecting these hot spots,”

Buholzer says.

Alongside the global banks,

newer players in the financial sector

are delivering innovative financing

mechanisms for environmental

investments. The Sydney-based

company Carbon Trade Exchange

(CTX) has launched a series of

carbon platforms around the world,

enabling market participants to

trade their carbon credits and

other environmental commodities.

By joining the CTX Voluntary

Carbon Market, businesses can

access hundreds of carbon projects

globally to offset their emissions

and become carbon-neutral. “A

large proportion of trading in the

global carbon market is still being

done over the counter or by direct

intermediaries,” CTX founder and

executive chairman Wayne Sharpe

says. “A carbon exchange is a much

more efficient way of distributing

funds to climate projects where

the need is greatest. Participating

in an exchange is one of the easiest

ways for a company to support

green growth and sustainable

development.”

Over the course of the last

18 months, concern has

been mounting about the

potential of financial technology

(fintech) to disrupt the business

models of existing lenders and

create new risks and uncertainties

for today’s banks. At the same time,

however, pioneering companies

are embracing these technologies

and developing innovative ways

of mobilizing capital, and helping

to make the financial system

greener, more sustainable and more

inclusive.

In recent years, mobile money

services have been leading the

drive to increase financial inclusion,

especially in sub-Saharan Africa.

Last year, a report from the World

Bank found that between 2011

and 2014, the proportion of adults

with a financial services account

increased from 51% to 62%, a

trend driven above all by mobile

money accounts in Africa. “Access

to financial services can serve as a

bridge out of poverty. We have set

a hugely ambitious goal—universal

financial access by 2020—and now

is now examining the potential for

adding new financial capabilities

to M-Pesa, such as international

money transfer, insurance services,

and government payments.

Meanwhile, long-established

financial institutions are also

working hard to support financial

inclusion and to increase

their funding of socially and

environmentally positive projects.

Banking giant Credit Suisse was an

early leader in the development of

microfinance and impact investing.

It is now looking closely at how it

can better mobilize private capital

to protect conservation hot spots

around the world. “Our best

contribution is in applying classic

banking services to respond to the

great global challenges of today,”

René Buholzer, the bank’s global

head of sustainability, says.

Public funds and charitable

donations by themselves will not

provide enough money to protect

valuable areas of conservation,

the bank believes. Working with

the World Wide Fund for Nature

(WWF) and consultancy McKinsey,

Credit Suisse has published a

research report, based on which the

bank has developed a new product

that enables private investors to

allocate their capital to conserving

vulnerable ecosystems, while also

generating a financial return. “It

is our responsibility as a bank to

help bring more private money

we have evidence that we’re making

major progress,” World Bank Group

President Jim Yong Kim has said.

In many African countries, more

people now use a mobile money

account than a bank account.

Many of them will be customers

of Vodafone’s pioneering M-Pesa

service, which after launching

in Kenya back in 2007 has now

spread to almost a dozen countries.

Wherever they are, any customer

with an M-Pesa account can use

their mobile phone to transfer funds

to other users and non-users and to

pay their bills, all for the cost of a

tiny transaction fee. According to

the World Bank, the affordability of

the service has been key in opening

the door to formal financial services

for Africa’s poor. In Kenya, around

40% of all cash transactions are

now carried out via M-Pesa.

“In the developing world, there is

no real easy access to the traditional

banking services and they tend to

be expensive for poorer people,”

says Michael Joseph, one of the

founders of the M-Pesa service and

now Vodafone’s director of mobile

money. “M-Pesa has brought some

basic financial services to people for

the first time and it has had a huge

impact on their lives.”

As well as serving as a medium

for transactions, M-Pesa also

enables poorer people, especially

women looking after their families,

to save, earn interest and borrow

against those savings, very often for

the first time in their lives. Vodafone

It is only by pursuing a responsible and forward-looking approach to business that we can achieve long-term success.” René Buholzer, Global Head of Sustainability, Credit Suisse

It is exhilarating to change people’s lives for the better and make their lives easier.” Michael Joseph, Director of Mobile Money, Vodafone

FINANCE & TRADE6

PH

OTO

: Pla

n In

tern

atio

nal

C

M

Y

CM

MY

CY

CMY

K

Content by THE BUZZ BUSINESS

SUPPORTING SUSTAINABLE TRADE

In Davos this year, politicians

and policymakers are debating

the next stage in the integration

of international trade, with giant

regional free trade agreements

set to transform global flows of

goods and services. At the same

time, the world’s consumers

are increasingly willing to pay

a premium for products made

to the highest standards of

sustainability. Few countries

are as well positioned to benefit

from these two trends as Italy,

where the business community’s

commitment to high-quality

exports has long been a source of

national pride.

“Italy is one of the E.U.’s lead-

ing countries in ensuring the

sustainability of its products

and of its entire supply chain,”

Deputy Minister

for Economic

A SAFE BET IN EUROPE

At the same time as it increases

its global exports, Italy is

also attracting ever higher levels

of foreign investment, especially

from companies in developing

countries that are looking to

secure a foothold in more stable

economies. One of the core topics

of discussion in Davos this year

has been the turmoil in the world’s

largest emerging markets. To help

investors from these countries and

others set up and run businesses

in Italy, the government of Prime

Minister Matteo Renzi has carried

out a wide-ranging series of legal

and tax reforms. As a result, in

AT Kearney’s FDI Confidence

Index 2015, Italy increased its

position to 12th overall, a rise of

eight places. In 2014, the country

experienced the highest growth

rate among European countries

for inward greenfield FDI projects.

“Thanks to the reforms, there is

now a greatly improved working

environment in Italy for investors,”

says Riccardo Monti, president of

the Italian Trade Agency (ITA).

“Italy has significant competitive

advantages for manufacturing and

exporting high-end products such

as pharmaceuticals and industrial

equipment. We are seeing a lot

of interest from investors in

developing countries, who want

to invest in Italy as a more secure

platform for growth.”

Renzi’s government has identi-

fied 50 measures to enhance the

country’s economic competitive-

ness and has so far approved

over 75% of them, includ-

ing removing obstacles

to hiring, new rules on

dismissals and intro-

ducing generous tax

credits for R&D.

As part of the

reform process,

Development Carlo Calenda says.

“There is now a fantastic oppor-

tunity for Italian companies, as

emerging markets such as China

switch to consumption-led growth

and towards more sustainable

models of development.”

The increase in exports is

currently powering the Italian

economic recovery. In the first

10 months of 2015, Italian

exports to countries outside the

European Union rose by 3.7%.

That performance reflects not only

the strength of foreign economies,

but also a targeted campaign by

Italy’s governments and businesses

to focus on expanding its market

share in those countries where

trade barriers are coming down

fastest. “Because of the high level

of tariff and non-tariff barriers in

countries in the Mercosur bloc, in

South America we have switched

our focus to more open markets,

such as the members of the Pacific

Alliance like Chile and Colombia,”

Calenda explains.

The export performance

of the country is increasingly

geared to the ongoing wave of

new free trade deals. Following

last year’s landmark Trans-Pacific

Partnership agreement, all eyes are

now on the proposed Transatlantic

Trade and Investment Partnership

(TTIP) between the E.U. and U.S.,

which will lead to the creation of a

de facto free trade area representing

63% of world trade. Participating

countries will be committed to the

values of sustainability and quality

for which Italian products are cel-

ebrated worldwide. “When Europe

and the U.S. come together to set

very high standards for entering

the market, standards will in-

evitably go up worldwide,”

Calenda says. “This will be

a very positive develop-

ment both for Italy and

for sustainable devel-

opment in general.”

the ITA has set up a new Foreign

Investment Department and has

stepped up promotion activities

internationally. The agency is

opening nine foreign investment

desks worldwide in strategic

markets including Istanbul,

London, Dubai, Singapore and

Shanghai. “We see a very positive

outlook for our economy driven

by strong exports and continued

growth in FDI. In recent years

foreign investors have been

drawn to developing markets,

but now they are now looking

for more security,” Monti says.

“They can come to Italy, enjoy

all of the advantages of an

advanced economy and still access

800 million people within a three-

hour flight.”

8

ITALY ASSERTS GLOBAL LEADERSHIP

This year, the government will complete the implementation of what we consider the most comprehensive structural reforms in any European country, making Italy an even more attractive place for business.” Riccardo Monti, President of the Italian Trade Agency

The world’s consumers are willing to pay higher prices for the sustainability and quality of Made in Italy products.” Carlo Calenda,Deputy Minister for Economic Development

FINANCE & TRADE

IMPROVINGTHE PRESENTBUILDINGTHE FUTURECNH Industrial is a global leader in the capital goods sector that, through its various businesses, designs, produces and sells agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles in addition to a broad portfolio of powertrain applications. Present in all major markets worldwide, CNH Industrial is focused on expanding its presence in high-growth markets, including through joint ventures.

Sustainability is an integral part of CNH Industrial’s DNA. It characterizes the company at every level, from the products it designs and produces, to the suppliers and components it uses, the facilities and local communities in which it operates and its 69,000 employees. Sustainable business is the key to building the future and as the Industry Leader in the Dow Jones Sustainability Index for the last fi ve years, CNH Industrial is playing its small part.

www.cnhindustrial.com

CNH_TimeAdV2.indd 1 11/12/2015 06:45

Content by THE BUZZ BUSINESS

CYPRUS: STABLE FINANCE, STABLE GROWTH

As the world’s policymakers

continue to grapple with

the consequences of the global

financial crisis, the remarkable

recovery of the island economy

of Cyprus has become a point

of reference in the debate. The

turnaround in the country’s

fortunes provides compelling

evidence that a rapid and radical

restructuring of the financial

sector, combined with other

reforms, can enable a country to

grow its way out of austerity and

back to stability and prosperity.

“Cyprus had to get back on

its feet quickly after the bailout

of 2013 to survive,” says John

Hourican, chief executive officer

of the Bank of Cyprus, the coun-

try’s largest bank. “The govern-

ment listened to the financial and

business community, maintained

the support of the

Cypriot people, and

acted swiftly to get the

country out of danger.

There’s not the same

sense of urgency in

some larger European

countries, which could

learn a lot from how

Cyprus is fixing its

economy.”

In March 2013,

following the bursting

of a bubble in credit and

housing, Cyprus became the

fifth European Union member

state to receive a bailout from

the E.U. and the International

share the same conviction that

change is the only way forward to

create sustainable development.”

Since Cyprus signed up to the

bailout program, the rapid pace

of reform has helped to eliminate

the country’s fiscal deficit, restore

the banking sector to health and

attract record levels of foreign

investment. Cyprus re-accessed

international capital markets

in 2014 and abolished its last

remaining capital controls last

year. Unemployment is heading

down, and the

economy returned

to growth in 2015

after three years of

recession.

The restoration

of confidence in

the banking system

has played a critical

part in steering

the economy back

on to a track of

sustained growth. “We

have seen an increase in deposits

month upon month since the

lifting of capital controls, because

people are now confident that the

bank and the country are on the

road to repair,” Hourican says.

Meanwhile, the Bank of Cyprus

has sold most of its international

operations and is normalizing

its funding arrangements. “We

have repatriated surplus liquidity

and capital outside Cyprus and

we are shrinking to strength in

our home market,” Hourican

says. Stronger balance sheets and

Monetary Fund. The government

was signed up to an ambitious

program of economic reform and

recapitalized the banking system,

in return for financial support

of €10 billion from the IMF and

European partners.

“The President, the government

and senior levels of management

in the banking system in Cyprus

were all very well lined up

together,” Hourican says. “We

were in a worse position than

Greece, with a broken banking

system and with customers

unable to access their deposits.

But in Cyprus there was more

determination from policymakers

in all areas of the economy to

resolve the crisis. We had a simple

mantra, which was to get it done.”

At the island’s third-

largest bank, Hellenic Bank,

Chairwoman Irena Georgiadou

says the key to the country’s

turnaround has been the

willingness of policymakers and

financial institutions to think the

unthinkable and to open a new

chapter in the island’s economic

development. “We wouldn’t have

been able to achieve what we have

done simply by going on with

business as usual,” she says. “At

Hellenic Bank, the pace of change

has been continuous. We have

altered our practices in nearly

all our business areas, and we

have brought in completely new

shareholders, management and

board of directors. The leadership

of Cyprus and of the banks all

10

higher deposits are setting the

stage for financial institutions to

step up their lending activities;

the island’s banks are now

focused on reducing the amount

of non-performing loans and on

putting their capital to work in

the wider economy. The Bank of

Cyprus in particular is looking

to finance new businesses and

entrepreneurs, and last year it

set up its IDEA Programme for

supporting innovative startups.

“It is our responsibility as a bank

to contribute to changing the

country’s economy for the next

generation,” Hourican says.

At Hellenic Bank, Georgiadou

says the institution is now the

largest source of finance for new

projects in sectors that are strategic

to the country’s economic future,

such as energy, education and

health. As the country looks toward

building a prosperous, sustainable

future, it is the consensus that

has been forged between bankers,

policymakers and the ordinary

people of Cyprus that may be the

island’s greatest asset, she says.

“Everyone is working together and

is committed to making Cyprus a

place where people want to come to

live, work and invest.”

Stable foundations for growth signal calm waters ahead for Cyprus

We are very focused on implementing change and on investing in the future.” Irena Georgiadou, Chairwoman, Hellenic Bank

We have to provide the conditions for the next generation to show us how to think differently.” John Hourican,CEO, Bank of Cyprus

Left: John Hourican, CEO, Bank of Cyprus Right: Irena Georgiadou, Chairwoman, Hellenic Bank

FINANCE & TRADE

Content by THE BUZZ BUSINESS

MINING BREAKS NEW GROUND

For one of the world’s oldest

industries, it has been a

transformational shift in

culture. In the face of an extended

slump in prices for metals and

minerals, the largest mining

companies are maintaining their

investments in support of the

communities affected by their

operations. These multinationals

recognize that their ability to develop

new projects and create long-term

value for shareholders now depends

as much on the consent of local

communities as it does on a return to

high prices in commodity markets.

“Whatever we do as an industry,

we have to think very carefully

where and how we invest,” says

Mark Cutifani, chief executive

officer of Anglo American. “As

much as we think about the actual

investment in our capacity, we also

have to think about that investment

in terms of communities.”

As chairman of the International

Council on Mining & Metals

(ICMM) from 2013 to 2015,

Cutifani has played a leading role in

steering miners toward a stronger

focus on long-term development

issues. In Western countries,

mining has historically been a

major contributor to economic

development, not only in providing

fuels and metals to industry, but

also in bringing road, rail and social

services to once impoverished

regions as a byproduct. Today,

in some of the remotest corners

of the world, miners are once

again catalysts for rapid social

It’s a groundbreaking approach

that is slowly winning the sup-

port of other companies in the in-

dustry. In 2014, mining giant Rio

Tinto contributed to around 2,200

socioeconomic programs across

40 countries, making communi-

ty contributions of $270 million

worldwide. “The truth is that you

can achieve shareholder returns

and growth while at the same time

making community contributions,”

chief executive officer Sam Walsh

says. “Good sustainable develop-

ment is good for business as well.”

“Mining companies do not

have a choice,” Keith Slack, global

program manager of Oxfam

America’s extractive industries

team, says. “Their continued

ability to get access to resources

depends on their having positive

and constructive relationships

with local communities. The more

progressive international mining

companies now understand this.”

and economic development. This

time, however, the environmental

and social needs of the countries

and the communities where they

invest are of paramount strategic

concern to mining multinationals.

“The key is that, as an industry, we

have learned about the potential

negative consequences of mine

development,” Cutifani says. “We

are now working hard to accentuate

the positive role that we can play,

and to make sure that mining plays

an integral part in the development

of an entire community, not only to

the benefit of a lucky few.”

To help achieve this ambition,

Anglo American has worked

with the Kellogg Innovation

Network of the Kellogg School

of Management at Northwestern

University on the Development

Partner Framework for mining

companies. Cutifani says the

framework aims to fundamentally

change the extractive business

model of the mining industry, and

to help miners become integrated

and proactive development

partners. “When miners go into a

community, they should start by

asking the locals what they want

for their children in the next 20 to

30 years and how they can help

them achieve those objectives,”

he explains. “That is very different

from a technical conversation

with a group of mine engineers.

We have to change the nature of

the conversation, from this very

different starting premise.”

As miners, we need to make sure that what we do makes a positive difference to the people affected by our operations and helps them maintain a meaningful existence.” Mark Cutifani, CEO, Anglo American

11

From left: Sam Walsh, CEO, Rio Tinto; Michael Fahrbach, Global Head of Sustainability, Glencore; Mark Cutifani, CEO, Anglo American; Elaine Dorward-King, Executive VP Sustainability and External Relations,

Newmont; Brent Bergeron, Executive VP Corporate Affairs and Sustainability, Goldcorp

MINING

Content by THE BUZZ BUSINESS

The sector’s focus on investing

in community relations is not

confined to the developing world.

Before beginning to develop its new

Éléonore gold mine in northern

Quebec, Canada, Goldcorp

worked hard to win the support

of the Cree Nation of Wemindji,

an indigenous community in the

region. The company only began

constructing the mine—which

started producing last year—

once it had signed a landmark

partnership agreement with the

Cree. That agreement has ensured

that the mine has had a very

positive impact on employment

rates in the Cree community;

Goldcorp invested in building a

Cree training center, and partly as

a result over one in five of the mine’s

employees are now Aboriginal.

“We believe that if you do not

have communities involved and

supportive of the project, then you

basically do not have a project,”

Brent Bergeron, the company’s

executive vice president for

corporate affairs and sustainability

says. “If your dialogue with

communities starts off on the right

foot, then you have the ability

to develop a relationship that is

open, transparent and based on

trust. The community knows that

they are involved in the project

with you, that they are a partner,

and they feel a sense of ownership

as well.”

Bergeron says that even before

acquiring the Éléonore project

from an exploration company over

10 years ago, Goldcorp was careful

procurement. “From the beginning

we have sought to engage with

the local people and consult

with them about the impacts

and opportunities of our mining

operations,” Elaine Dorward-

King, Newmont’s executive vice

president of sustainability and

external relations, says. Around a

quarter of the project’s permanent

employees now come from the

surrounding community.

In Suriname, as well as

prioritizing dialogue with the

local communities, Newmont

is also committed to ensuring

transparent relations with the

national government, which in

2014 acquired a 25% stake in

the Merian project. Worldwide,

the company is actively involved

with the efforts of the Extractive

Industries Transparency Initiative

(EITI) to improve governance in

resource-rich countries, and it

already publicly discloses its global

tax and royalty payments. “One

of the reasons why transparent

royalty and tax payments are so

critical to the mining industry

is that it is the only way for

local people to feel that they’re

fully sharing in the economic

opportunity,” Dorward-King says.

“There needs to be transparent

governance structures in place if

our investments are to create real

long-term value for people.”

Given the downturn in

commodity prices, the resurgence

in resource nationalism and the

rise in environmental concerns,

these haven’t been the easiest

times for miners to create that

value. Nevertheless, by embracing

the values of sustainability and

transparency, leading companies

in the sector have been able to

create more resilient business

models that can stand up to

the stresses of today’s difficult

conditions. “As a company we are

always looking to make a profit,

but we also understand that in

order for this to be sustainable,

we have to bring something

lasting to the communities where

we work,” says Michael Fahrbach,

global head of sustainability at

Glencore. “We know that we

need to partner if we are to turn

the economic opportunities of

mining into realities.”

Signaling its commitment

to sustainable development,

Glencore joined the ICMM in

mid-2014 and later that year

launched a pilot project to help

it measure just how much value

its investments create for society.

The aim of this social value

model is to develop a consistent

approach across Glencore’s

global operations. With numbers

from this scorecard in hand, the

company’s management can make

a compelling case to stakeholders

and outsiders, securing the social

licenses to operate Glencore’s

various extractive businesses. Over

the course of 2016, Glencore will

roll out the new model across all its

operations. “We already invest in

building schools and hospitals for

local communities, but that’s not

the whole story,” Fahrbach says.

“We also want to show how our

everyday mining operations create

jobs, develop infrastructure and

educate people. It is important for

mining companies to continuously

inform people of their progress

and to show them that they will

continue to manage sustainability

for the benefit of all. Sustainability

is one area where Glencore will

not be cutting back.”

to survey the state of community

relations ahead of closing the deal.

The company has deliberately

chosen not to invest in other

projects where relationships with

local communities were more

problematic. “Our view is that if

we are going to work together on

traditional lands and are going to

be partners, we have to establish

this trust and genuine partnership

before we can move forward,”

Bergeron says.

In countries without the long

mining heritage of jurisdictions

such as Canada, the world’s leading

miners are now introducing these

best practices in community

relations and in transparency.

In Suriname, the smallest

independent country in South

America, gold miner Newmont

is ensuring that its $1 billion

Merian gold project will generate

sustainable economic and social

benefits for local communities and

for the wider population. Ahead of

starting the production this year,

the company signed an agreement

with the Paramacca community

that includes the creation of a

development fund and terms

for local employment and

For Anglo American, sustainable mining means caring for communities

Goldcorp’s Marlin mine is creating new opportunities in Guatemala

Our new scorecard for social value creation enables us to demonstrate our contribution to a community.” Michael Fahrbach,Global Head of Sustainability, Glencore

12 MINING

Content by THE BUZZ BUSINESS

MEETING THE ENERGY CHALLENGE

For WEF participants

gathering in the glittering

conference halls of Davos, it

may be hard to imagine, but over

1 billion people around the world

still do not have access to electric

light. At night, one in seven of

the population relies on highly

polluting kerosene lamps and

wood fires to provide the light they

need for reading, working and even

for basic healthcare. Improving

access to light for this forgotten

billion has become a rallying cry

ports for charging cell phones,

which have become critical

enablers of rural development.

Philips is currently working

with governments and NGOs

to implement the technology,

with the goal of ending

light poverty by 2030.

“If the relevant

stakeholders work

with us, we can

achieve this, but

we can’t do it on our

own,” Rondolat says.

That’s a recurring

message from industry

leaders at Davos.

Policymakers need to

work more closely with

the private sector to

support investments that

are economically viable

as well as environmentally

and socially sustainable. “The world

knows that it needs more energy

but less carbon. It’s a complex

problem,” says Charlotte Wolff-

Bye, vice president of sustainability

at Norway’s Statoil. “We need

an orderly transition that will

incentivize the right investment

in low carbon and the

right innovation.”

Statoil is a member

of the Oil and Gas

Climate Initiative

(OGCI), which the

industry established

following the WEF

meeting of 2014 to

make the case for low-

carbon energy solutions.

“The industry is leading

the way, but we need

more political will

and support,” Wolff-Bye

says. “Davos can play a

critical part in enabling the

dialogue that we need to catalyze

real industrial action.”

for leaders in sustainable energy

innovation.

“We want to tell the world

not only that something needs

to be done, but that something

can be done,” says Eric Rondolat,

chief executive officer of Philips

Lighting, which sponsored the

UN International Year of Light in

2015. “The technological solution

to this problem now exists—solar

LED lanterns—and it is a solution

which also makes economic sense.”

Whereas families in Africa

and elsewhere today can spend

upwards of $50 a year on buying

kerosene and wood for their fires,

a basic solar LED lamp represents

a one-off investment of $20. Solar

LEDs provide more powerful light

than candles and fires, they are

safer, and they do not produce the

smoke that condemns millions of

people each year to an early death.

Some models also contain USB

We need to provide energy for 9 billion people by 2050 and this needs to be clean, sustainable energy with very low carbon emissions.” Charlotte Wolff-Bye, VP Sustainability, Statoil

Ranked as the Dow Jones Sustainability Index’s overall leader in mining in 2015

Creating value and improving lives through sustainable and responsible mining

newmont.com | beyondthemine.comPlease follow us on

ENERGY 13

Our mines create social and economic benefits in the communities where we live and work. Thousands of jobs, local purchasing, responsible operations, and programs that help create healthy, vibrant and engaged communities – just a few of the ways we’re working together to create sustainable value for generations to come.

WE DO MORE THAN OPERATE GOLD MINES

TSX:G NYSE:GGcsr.goldcorp.com

IMAGE: 1. Bjørn Haugland, Executive Vice President and Chief Sustainability Officer, DNV GL Group • 2. Ada Colau, Mayor of Barcelona • 3. Wayne Sharpe, Executive Chairman and Founder, Carbon Trade Exchange • 4. Nick Henry, CEO, Climate Action • 5. Michael Gill, Executive Director, Air Transport Action Group (ATAG) • 6. Niels B. Christiansen, CEO, Danfoss • 7. Amar Hanspal, Senior Vice President, Autodesk • 8. Magnus Hall, President and CEO, Vattenfall • 9. Dean A. Scarborough, Chairman and CEO, Avery Dennison • 10. Julie Felgar, Managing Director Environmental Strategy and Integration, Boeing Commercial Airplanes • 11. Frédéric Eychenne, New Energies Program Manager, Airbus • 12. Christopher Lorence, General Manager, Engineering Technologies, GE Aviation • 13. Amr Salem, Global Managing Director, Smart Cities IoE, Cisco Systems • 14. Mark Elliott, Division President, MasterCard South Africa

THE Q&A

A: We are in a process of rethinking politics and society after the years of the consumerist model, when resources seemed

unlimited and the profits of large corporations and banks were seen as an indication of general economic growth. We are now changing these mantras. This will take time, even decades. Our focus on citizenship is giving a renewed meaning to the word democracy. People need to be at the center of the institutions’ focus in social and economic matters. A speculative economy is an anti-economy. Economy comes from the Greek and it

means the good management of a household’s resources. Q: What policies are you

undertaking in Barcelona to

change the economic model?

A: Barcelona is a very rich city with plenty of resources, but these resources have been managed terribly. We want to manage these resources for the general interest. For example, in the housing sector politicians claimed that the private market would be more efficient, but we have seen that without a set of restraints, profit-seeking was able to take the upper hand over basic human rights. As a result, Spain is the European country where the highest numbers of people are evicted and where homes are most unaffordable to ordinary people. We believe that this is anti-economic. A home is

Q: Why do you think the people

of Europe are turning toward

more progressive politics?

A: Because the things that used to work are not working anymore. Worldwide, but especially in Spain, we have gone through a traumatic learning process. It’s not just an economic crisis; there is a political crisis underlying the economic one. We want to move away from the model in which the few were deciding for the many, with oligarchical interests taking priority over the general interest. The bubble years in Spain were based on a model of unlimited growth, never-ending resources and unchecked, short-term speculation. The Spanish miracle proved to be a mirage.Q: What is Barcelona proposing

as an alternative to the neo-

liberal model?

ADA COLAU, Mayor of Barcelona

What people are asking for is real democracy.”

a basic necessity in people’s lives. Housing needs to be treated as a fundamental right and not as a consumer good, which is what happened for decades here. We want to prioritize the social function of housing over its speculative function.

14

Q&ATHE

1

7

6

8 9 10 11

12 13 14

2 3 4 5

Content by THE BUZZ BUSINESS

can have a big impact on emissions.

We use Building Information

Modeling to describe a building as

completely as possible, so we can

compute in real time the energy

footprint of a building.

Q: How can technologies improve

a building’s performance?

A: We can deliver energy efficiency

improvements of 30-40% while also

making people more comfortable.

When you swipe your card as you

enter the building, the building

will know that you need to get to a

certain floor and it will turn on the

lights and air conditioning to your

preference before you arrive.

Q: What impact will 3-D printing

have on building design and

construction?

A: We’re still using processes from

the industrial revolution. With the

new technology, some of the shapes

and materials in buildings are being

replaced by 3-D printed façades,

connections and joints.

Q: How important is sustainable

design to Autodesk?

A: We are a software company,

and we figure out what we can do

through our digital tools to enable

people to make better decisions.

Anything that we can do to reduce

the carbon footprint of buildings

AMAR HANSPAL, Senior Vice President, Autodesk

MULTINATIONALS ARE USING TECHNOLOGICAL INNOVATIONS TO CHAMPION SUSTAINABLE DEVELOPMENT

Q: How can policymakers use

smart city technologies to

improve urban sustainability?

A: The smart city is about people,

not technology. Policymakers need

to understand the priorities of the

citizens in the city and create a

plan that includes the ecosystem

they need to be successful. There

must be a cultural change, not just

a technology fix. More computers

will not make it happen.

Q: What are the key areas for

action?

A: Currently we are focusing

on the environment, on

transportation, city security,

and energy. For example, 50% of

the energy consumed in cities is

in street lights. We are enabling

a movement toward smart LED

lights, which can generate a huge

saving, freeing up city budgets to

Q: How important is urban

development to sustainable

development in general?

A: It is critical. People live in cities,

not in countries. They tend to

relate to the city they are living in

much more than to their country.

We engage and interact with our

home town every day. Cities are

definitely the main drivers of the

world’s sustainability agenda. In

the future, they will be able to

consume less energy, to create

efficiencies and generate new jobs.

AMR SALEM, Global Managing Director, Smart Cities IoE, Cisco Systems

We have to change the way that people live and behave in cities.”

3-D printing is revolutionizing the kind of products that people can create.”

spend elsewhere. In the transport

area, we are helping cities become

more efficient in collecting parking

fees, while making it easier for

drivers to find a parking space.

City governments are using

technology to address the specific

priorities for which the people

elected them. Urban residents

want to live in a safe environment

where they benefit from good city

services. Whether in environment,

transport or safety, technology will

play a key role.

A: Every digital device has the

potential to be a payments device,

but if we simply digitize the tools

without extending them to those

outside the system, we risk having

the “Internet of Everything”

without the “Inclusion of

Everyone”.

Q: What is MasterCard’s role in

driving the adoption of mobile

money services?

A: We can connect a complicated

web of players who operate with

different rules and technologies.

Together, we can drive ubiquity,

safety, and utility—the triple key

to success in mobile payments.

Our challenge is ensuring that

mobile payments and financial

services are at least as convenient

and interoperable as cash.

Q: How can mobile communica-

tions technology improve finan-

cial inclusion in Africa?

A: Bricks and mortar infrastruc-

ture costs render traditional

banking models too uneconomi-

cal to reach low-income or rural

populations. Done right, mobile

money can bring the banked

world to the unbanked in ways

that are useful in their daily lives.

Q: What are the socioeconomic

benefits of mobile money?

MARK ELLIOTT, Division President, MasterCard South Africa

For many users it is the first time they have had access to the banking system.”

15Q&A TECHNOLOGY

Content by THE BUZZ BUSINESS

80% on a gallon for gallon basis

compared to petroleum jet fuel.

The level of emissions reduction

is staggering.

Q: How are airlines preparing

for biofuels?

A: Aviation biofuel is not a science

Strategy and Sustainability

encourages its readers to filter

out the noise and make those

choices in a hard-nosed and clear-

eyed way. Professor Rosenberg’s

nuanced and fact-based point of

view recognizes the complexity of

the issues at hand and the strategic

choices businesses must make.

He blends the work of some of

the leading academic thinkers in

the field with practical examples

from a variety of business sectors

experiment—it is real and it is a

genuine alternative to fossil fuel.

Three types of aviation biofuel have

been approved so far. Approved

biofuel is blended directly with

petroleum jet fuel and used in

airplanes. Biofuel is safe and has

been used in as many as 2,000

flights already. Aviation biofuel

can safely power any commercial

airplane flying today. Biofuel is

happening much faster than other

alternative energy sources.

and geographies and offers a

framework with which senior

management might engage with

the topic.

Mike Rosenberg is an Assistant

Professor at IESE Business School.

Professor Rosenberg joined the

faculty at IESE after working for

more than 15 years as a management

consultant for companies such as

Arthur D. Little, A.T. Kearney and

Heidrich & Struggles working in

Europe, North America, and Asia.

Q: What technology has the

greatest potential to make

aviation more sustainable?

A: Sustainable aviation biofuel is

by far the most disruptive thing

that can happen to help us achieve

our environmental goals. When

it’s produced under optimum

conditions—reducing net CO2

emissions while meeting other

socioeconomic and green crite-

ria—sustainable aviation biofuel

reduces CO2 emissions by 50 to

Business and environmental sus-

tainability are not natural bedfel-

lows. Business is about making

money; sustainability is about

protecting the planet. Sustainabil-

ity often requires significant short

term costs to secure a sometimes

uncertain long-term benefit.

And yet engaging with the

issue isn’t optional—all businesses

must have a strategy to deal with

sustainability and, like any strategy,

this involves making choices.

JULIE FELGAR, Managing Director Environmental Strategy and Integration, Boeing Commercial Airplanes

THE AVIATION INDUSTRY IS DEVELOPING A WIDE-REACHING STRATEGY FOR CUTTING EMISSIONS

the global Market-Based Measure

(MBM) for emissions.

Q: How is the industry pro-

gressing toward the MBM?

A: The current round of

negotiations on the MBM are an

outflow from the Assembly of

the International Civil Aviation

Organization (ICAO) in 2013.

Governments agreed to work on

the development of a framework to

be adopted at the 2016 Assembly.

The most notable aspect of the

political discussions is that those

who were previously dragging their

feet are now totally supportive. We

have seen a broad consensus to

move forward with the discussions

in a productive manner. We are

happy with the direction that the

debate is moving; the fundamentals

and the building blocks look solid.

Q: How is the aviation industry

responding to climate change?

A: In 2008, the industry adopted

a four-pillar strategy aimed at

reducing CO2 emissions. The first

three pillars are new technology,

improved engine performance and

sustainable and alternative fuels.

There will also be a number of efforts

made to improve the operational

measures; we would like to fly more

efficiently and make better use of

infrastructure both on the ground

and in the air. The fourth pillar is

MICHAEL GILL, Executive Director, Air Transport Action Group (ATAG)

Boeing is looking for opportunities regionally and globally to expand the biofuel supply.”

Our role is to unite industry and bring together all sides to reach an agreement.”

Q: When will the MBM be in

place, and what will it entail?

A: The scheme will be put into place

from 2020 onwards. This will be the

first time that a global MBM will ever

have been agreed and implemented

by governments for any sector.

Q: What is ATAG’s role in coor-

dination?

A: Very little can be achieved

without cross-sector commitment

from all sides. Our role is to bring

together all sides to reach an

agreement.

Q&A AVIATION16

A BUZZ RECOMMENDED READ: by Professor Mike RosenbergStrategy and Sustainability

Content by THE BUZZ BUSINESS

17Q&A AVIATION

THE AVIATION SECTOR IS FOCUSED ON BIOFUELS, RECYCLING, AND FUEL EFFICIENCY

new technology. Low fuel prices

won’t always stay that way. Beyond

fuel prices, our customers are also

focused on other operating costs,

such as lower maintenance costs

and emission taxes. So the current

fuel price reductions haven’t

changed our focus on fuel efficiency

and investing in new technology to

benefit our customers.

Q: What is the potential of the

Industrial Internet to improve

engine performance?

A: We already get a tremendous

amount of data from our engines.

This data can enable us to better

predict durability problems and

make fuel burn savings. We know

how to do this. Now we just need

to work on the education process

so that our customers can better

understand the benefits that this

data can provide. The Industrial

Internet helps us do less testing,

use data for optimization and in-

novate manufacturing.

Q: How will the fall in the oil

price affect aviation’s approach

to sustainability?

A: The oil price reduction isn’t a

major concern to our business.

Aviation is a long horizon business

in terms of the development of

CHRISTOPHER LORENCE, General Manager, Engineering Technologies, GE Aviation

emissions. We cut CO2 emissions

by more than 40% compared to

a regular flight. This was not a

test flight, but a commercial flight

with passengers.

Q: How are you working to

increase the supply of biofuels?

A: We have projects in many parts

of the world. In Europe, we are

participating with KLM in the

ITAKA initiative, using camelina

oil from Spain. I am certain that

we will achieve the EU target

of 2 million tons of sustainable

biofuels being used in civil

aviation by 2020.

Q: Is the aviation community

coming together to create cleaner

skies and a more sustainable

industry?

A: If you want to talk about

objectives, you have to work

together as an extended team

Q: How do your ‘Perfect Flights’

minimize CO2 emissions?

A: When we carry out a Perfect

Flight with airlines, we integrate

all our best practices to reduce

the CO2 footprint. For example,

with Air Canada we used a 50%

sustainable aviation fuel blend

made with used cooking oil.

We used different procedures

for engine washing and

cleaning and for taxiing on the

ground. Streamlined air traffic

management also helped reduce

FRÉDÉRIC EYCHENNE, New Energies Program Manager, Airbus

In five to fifteen years we may be using very different fuels.”

The aviation industry needs to come together to create more fuel efficient aircraft.”

within the aviation community. It

is not just the airlines that need

to act but also the politicians

and the investors. We need to

promote sustainable aviation, not

only its technical aspects.

We need to define a shared vision

with shared objectives. If we do

that, we will be able to fill the

gaps we have to face together and

we will provide solutions, new

services, etc. If we work together,

it is easier to share the objectives

and the challenges.

Declaration (EPD). Our all-new C

Series aircraft will be issued with

an EPD when they enter service,

which will be an industry first.

Q: How will the EPD increase the

competitiveness of the C Series?

A: Part of the reason we are

pursuing the EPD was because

our train division does it too.

This is an overall objective we

have, producing EPDs for all

new products that we make as an

organization. The other reason is

because we recognize there is much

more environmental focus than

there has ever been before. The

best way to communicate this is in

a transparent way. The EPD allows

us to do that. All the information in

it will be externally verified.

Q: How do environmental con-

siderations influence your design

and manufacturing processes?

A: We look at design,

manufacturing, supply chain,

maintenance and operation,

and end-of-life all from an

environmental perspective.

Life-cycle analysis helps you

understand the environmental

impact of a product much better.

It is what provides the information

for the Environmental Product

BRUCE PARRY, Head of Sustainability, Product Development Engineering, Bombardier

As an aircraft producer we need to extend our responsibilities by looking at end-of-life solutions.”

Content by THE BUZZ BUSINESS

more emphasis on renewable

energy and storage capabilities.

Q: How important is government

support to renewable energy

investments?

A: For the foreseeable future, with

wholesale prices as low as they are

today and even with costs coming

people can relate to a wind turbine

in a way that they can’t relate to

efficiency. But the reality is that

investment in energy efficiency

can have a much shorter payback

time and be more predictable than

investment in renewables.

Q: What impact has the global

slowdown had on demand for

energy efficiency?

A: Although it has not been

positive, the slowdown has

increased people’s focus on energy

down considerably, political and

monetary support for the industry

will be crucial.

Q: What are you doing to reduce

the cost of wind power?

A: We are working very closely

with turbine suppliers on the next

generation of turbines. It’s a major

focus of our R&D. There is also a

lot that public authorities can do to

improve the efficiency of tenders

and auctions and to de-risk the

whole operation.

efficiency, because they can achieve

relatively safe and secure financial

savings.

Q: What interest are you seeing

in district heating, and why?

A: We are working with the city of

Anshan in northern China to use

surplus heat from a steel plant for

district heating. This will reduce

the need for coal fires, which are

highly polluting. The air will be

cleaner as a result, and the city

won’t need to buy so much coal.

Q: How are you preparing for the

evolution of the electricity system?

A: In the future, there will be

distributed production, with

consumers becoming producers.

We already buy back electricity

from our consumers with solar

panels, when they have excess

capacity. To make the whole system

efficient, there will need to be an

intelligent grid system that also

includes possibilities for energy

storage. In our R&D we are putting

Q: How important is energy

efficiency to sustainable devel-

opment?

A: Historically the industry has not

been very successful in marketing

energy efficiency. It has been

easier to market renewable energy;

MAGNUS HALL, President and CEO, Vattenfall

NIELS B. CHRISTIANSEN, CEO, Danfoss

ENERGY EFFICIENCY AND RENEWABLE ENERGY ARE LEADING THE WAY TO DECARBONIZATION

of risk and risk management,

sustainability is also being

discussed as an opportunity—

people are looking at sustainability

as a driver of opportunities.

Q: Is sustainability mainly an

issue for big companies?

A: The small and medium sized

companies are probably the next

wave. The big companies have a

role to play here as well because

they can make requirements

down their supply chain. We are

already seeing the start of this.

The smaller companies also need

to be inspired and to be equipped

with the knowledge and tools to

start moving.

Q: How is the relationship

between sustainability and

innovation evolving?

A: It is becoming stronger all

the time. Sustainability is fueling

Q: What were the main findings

of your report on corporate

sustainability for the U.N.

Global Compact?

A: We were honored to take on the

job of assessing the impact of the

U.N. Global Compact since it was

founded in 2000. Our main finding

was that a lot has happened, but

far from enough. Sustainability has

moved from the corner office of

the corporate responsibility officer

to the boardroom. As well as

being discussed in the perspective

BJØRN HAUGLAND, Executive Vice President and Chief Sustainability Officer, DNV GL Group

Sustainability is the foundation for running any energy business.”

Companies are now developing a more mature view of their role in society.”

Urbanization will require innovative, energy-efficient infrastructure.”

the priorities of our research

and innovation agenda. Another

aspect is that increasingly we

have to work on these innovation

challenges together, with our

customers and with other

partners. Many of the challenges

of sustainability cross over

different sectors. It is important

to bring different sectors together,

such as the oil and gas sector with

offshore wind. These challenges

cannot be solved by one company

alone.

Q&A ENERGY18

Content by THE BUZZ BUSINESS

their brand or provide information

about the types of clothes or the

origins of the clothes. We offer

them recycled labels made from

recycled water and soda bottles.

Q: What other innovations have

you introduced?

A: In the U.S., there is an issue

with polyester bottle recycling; if

Q: How important is private sec-

tor innovation to fight climate

change?

A: We believe that businesses are

crucial in combating climate change

through innovative technologies

and finance. We launched Climate

Action because we were frustrated

that governments and businesses

were not working together. Unless

business participates and can deliv-

er on the technologies, we are not

going to achieve our climate targets.

they use pressure sensitive labels

it is very difficult to separate

them from the plastic flakes.

The only use then is to down-

cycle the products, making park

benches and things like that.

Our CleanFlake™ technology

makes sure that the labels and

adhesives on PET bottles cleanly

separate from the plastic during

the recycling process. That means

the PET can then be used to make

bottles again.

Q: Where is more action needed?

A: We need more finance. That is

crucial because without finance we

will not hit the target of holding

warming below 2°C. We have

approximately 20% of the finance

in place for meeting that target, so

there is a huge gap.

Q: What are you doing to develop

a more sustainable paper supply?

A: Our goal in 2025 is to have 70%

of our paper sourcing FSC certified,

which is the highest standard of pa-

per certification. We have made a

lot of progress in the last few years.

In Europe, 66% of the paper that

we supply is already FSC certified.

Q: How do you help apparel com-

panies become more sustainable?

A: Our role in the packaging area

is to help apparel brands enhance

Q: Who are the members of

Climate Action?

A: Climate Action was established

in 2007 to facilitate partnerships

between business, government

policy makers, multinational

organizations, and NGOs. Our

aim is to accelerate international

sustainable development and

advance the green economy.

We have a unique contractual

partnership with the United Nations

Environmental Partnership.

DEAN A. SCARBOROUGH, Chairman and CEO, Avery Dennison

NICK HENRY, CEO, Climate Action

THE PRIVATE SECTOR IS DRIVING SUSTAINABLE INNOVATION IN TECHNOLOGY AND FINANCE

transitioned from CERs into the

voluntary market.

Q: How are you building your

market share?

A: A very large portion of the

global carbon market is still

carried out over-the-counter or

by direct intermediaries. We are

building an infrastructure that

makes us massively superior so

we can grow our market share.

The security and complexity

needed for a global exchange

solution is not easy to build,

but we already have contractual

relationships with more than a

dozen registries.

We want to engage with all the

brokers in the market. We want

to provide the global scale and

capacity needed to address

the climate change problem.

Q: What trends are you seeing

in carbon markets?

A: In the last few years, the

regulated and voluntary markets

have been affected by an

oversupply of carbon credits.

Prices have tumbled and it’s very

difficult to make an economically

viable project for Certified

Emissions Reduction (CERs).

Oversupply in the U.N. regulated

market has caused some price

declines in the voluntary

market because companies have

WAYNE SHARPE, Executive Chairman and Founder, Carbon Trade Exchange (CTX)

We are using materials science to make more sustainable products.”

There is no excuse not to act. You don’t have to wait for the government to tell you what to do.”

The private sector needs to understand that green business is also profitable business.”

Exchange technology is the only

way to achieve that.

Q: What are your key target

markets?

A: In the last year we have

predominantly targeted and

focused on developing the

U.S. market. We have built

our platform for the California

carbon market and our

platform in New York is live

and operational. Now we want

to raise money to re-enter the

European market.

19Q&A SUSTAINABLE INNOVATION

www.thebuzzbusiness.com

Content by THE BUZZ BUSINESS