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SUSTAINABLE INVESTMENTS INSPIRING
CORPORATE SUSTAINABILITY
OR VICE VERSA?
© Philipp A. Schoeller, Member of the Executive Committee German Society Club of Rome, November 2016
2
30 YEARS AFTER TRUMP – IMPACT ON BERLIN…
© Philipp A. Schoeller, November 2016
3© Philipp A. Schoeller, November 2016
US IN DENIAL – WAKE-UP CALL FOR EUROPEINCREASED RESPONSIBILITY FOR COR
4
SUSTAINABLE INVESTMENTS (SI) AND CORPORATE SUSTAINABILITY (CS):
COMBINED IT’S”SICS ”…TO TWELVE
© Philipp A. Schoeller, November 2016
Our “timer” isticking…. …and mankind
might run out oftime.
BIOSPHERE – ONLY 20KM THIN
Biosphere: ¾ 11,034m max. ocean depth (Mariana Trench)¾ 8,848m max. surface height (Mount Everest)
19,882m i.e. 20km
5© Philipp A. Schoeller, November 2016
6
…we aremerely living
in themembrane
of a balloon
© Philipp A. Schoeller, November 2016
7
FUTURE GENERATIONS WILL SAY“THE DARK AGES OF THE OIL BURNERS” EVERY 3 DAYS CO2 PRODUCTION FILLS LAKE CONSTANCE – RELEASING IT INTO OUR FRAGILE “8848m”–ATMOSPHERE
© Philipp A. Schoeller, November 2016
200,000 swimming pools* CO2 per DAY! oil consumption of 97m bbl/day expands into 1000x the CO2 volume
* Average size of a typical garden pool: 8m x 4m x 1.5m
7
TRY TO KEEP AN ICE CUBE FROM MELTINGUNDER OUR HOT „CO2-BLANKET“: EARTH WITHOUT ICE? SEA LEVEL AT + 66M
88mapsontheweb.zoom-maps.com
9© Philipp A. Schoeller, November 2016
SICS vital for survival!
What's working?
What isn’t working?
Action!
10© Philipp A. Schoeller, November 2016
!
SUSTAINABLE INVESTMENTS TURNED MAINSTREAM – UN PRINCIPLES OF RESPONSIBLE INVESTMENT
11
NEGATIVE SCREENING OR INVESTMENT EXCLUSION AT WORK
© Philipp A. Schoeller, November 2016
12
NEGATIVE SCREENING OR INVESTMENT EXCLUSION AT WORK
© Philipp A. Schoeller, November 2016
Start of discussions onUN Investment Principles
13
THE 5 MOST VALUABLE CORPORATIONS WENT FROM INDUSTRIAL TO INFORMATION AGE IN ONLY 25 YEARS
© Philipp A. Schoeller, November 2016
1991 (25yrs ago)General Motors(Automobiles; oil-driven)Royal Dutch Shell(Oil & Gas)Exxon(Oil & Gas)Ford(Automobiles; oil-driven)Toyota(Automobiles; oil-driven)
Apple(Technology)Alphabet(Internet/Technology)Microsoft(Software)Amazon(Online Retail)Berkshire Hathaway(Investor)
2016 (today)
14
THE MOST POWERFUL COMPANIES ARE ON THE WAY TO BECOME THE MOST SUSTAINABLE ONES AS WELL
© Philipp A. Schoeller, November 2016
“Using green power at Google, we are committed to powering 100% of our operations with clean energy…” “…we’re generating enough
renewable energy to cover 93 % of the electricity we use at our facilities worldwide…”
“BHE Renewables encompasses BHE Solar, BHE Wind, BHE Geothermal and BHE Hydro. These companies make us the owner of one of the largest renewable energy portfolios in the U.S….”
from the Environmental Responsibility Report
15© Philipp A. Schoeller, November 2016
SICS vital for survival!
What's working?
What isn’t working?
Action!
16
THE PLANET/PROFIT MATRIX:CAN PROFIT & PLANET BE COMBINED?
© Philipp A. Schoeller, November 2016
Planet
Profit
OldIndustry
„profit from planet“
NGO„profit for planet“
LocalBusiness
NewIndustry
„profit & planet“
17
YES - SUSTAINABLE STRATEGIES INCORPORATE PROFIT AND PLANET
© Philipp A. Schoeller, November 2016
Planet
Profit
18© Philipp A. Schoeller, November 2016
Planet
Profit(out of) business as usual
“profit”from test software
leading to1000x
the“profit”
inmarket
valuation
loss
THE TRADE-OFF PROFIT FROM PLANETIS NOT ATTRACTIVE TO INVESTORS ANYMORE
19
NON-SUSTAINABLE FIRMS NEED TO REINVENTTHEMSELVES – OBJECTIVE: PROFIT & PLANET
© Philipp A. Schoeller, November 2016
Planet
Profit
20© Philipp A. Schoeller, November 2016
?
CORPORATE SUSTAINABILITY = TRIPLE BOTTOM LINE = PPP = CSR = ESG = SEECOULD IT OFTEN BE GREEN-WASHING ONLY?
ONLY CSR EXECUTIVE’S JOB?
FOCUS ON CORE:SUSTAINABLEBUSINESS SYSTEMS
-> CEO’S JOB!
21
“A GOOD DISRUPTION” BOOK BY OUR NEW DGCORMEMBER MARTIN STUCHTEY – AMPLE NEW DIMENSIONS OF SUSTAINABLE BUSINESSES ARE AHEAD
© Philipp A. Schoeller, November 2016
22
Example: “NO LIMITS TO GROWTH” IN GLOBAL SOLAR PANEL INSTALLATIONS
© Philipp A. Schoeller, November 2016
Solar Panel Installations 1975-2015
23
“NO LIMITS TO GROWTH” IN ALLSUSTAINABILITY MARKETS - DECLINE IN OTHERS
© Philipp A. Schoeller, November 2016
GDP
Time
“Cradle to cradle”- Re-generate/up-cycles- Sharing economy- Solar & wind energy- Electric mobility- Virtual reality- etc.
“Cradle to waste”- Combustion engine- Oil & gas- Off-line- Paper- etc.
World economies remain stagnant
24
THE CONSUMER IS ALWAYS OPTIMIZING HIMSELF – CHEAPER IS BETTER
© Philipp A. Schoeller, November 2016
better use of idle capacitySelf-starterconsumer
will choose thebetter world
CheaperProfit andplanet
25
NON-STARTER CONSUMER BUYS “CHEAPER” BUT THE TRUE COSTS ARE NOT INCORPORATED
EXTERNAL COST NEED TO BE INTERNALIZED
© Philipp A. Schoeller, November 2016
Sustainableproduct
Cheaper ?? true costs not accounted for
no further natural costs Expensive ?
Non-starterconsumer
will choose the worst world:
based on incomplete
costs -true i.e. natural
costs are not accounted for
Profit fromplanet
26© Philipp A. Schoeller, November 2016
SICS vital for survival!
What's working?
What isn’t working?
Action!
27
TRUE COST ACCOUNTING
© Philipp A. Schoeller, November 2016
Profit fromplanet
EXAMPLE OF DRAMATICALLY DIFFERING TRUECOST SITUATION TAKING INTO ACCOUNTTRUE COSTSAT UTILITIES
28© Philipp A. Schoeller, November 2016
ca. 10c/KWh = 50% cheaper
in total ca. 20c/KWh each = real costs
Solar Fossil Nuclear
5-8c/KWh
2-3c/KWh
pluscosts of20,000 yearsstoragepluscosts ofradioactivecontaminationof mankindand natureetc.
pluscosts tomake pollutionCO2-neutralpluscostsofglobalwarmingetc.
plusnothing!
volu
me
effe
cts
plus
third
-par
ty c
osts
plus
third
-par
ty c
osts“and the winner is...”
29
REGULATORY MEASURES FORBUSINESS SYSTEMS TO MAKE COSTS COMPARABLE: APPLES WITH APPLES
© Philipp A. Schoeller, November 2016
Sustainableproduct Cheaper
better use of idle capacity
true costs not accounted for
no further natural costs
Expensive ! true costs accounted for
Cheaper
Profit fromplanet
Profit andplanet
30
NATURAL COSTS MUST FINALLY BEACCOUNTED FOR – WITH THE PROCEEDSLET‘S CREATE A WORLD RESCUE FUND…
© Philipp A. Schoeller, November 2016
¾ World RescueFund
¾ Consumer chooses„for planet“
¾ Sources for a World RescueFund
¾Certification of producers
¾Carbon credits¾VAT for each
product untilnatural costscovered
¾Green accounting
¾……………
31
…CLUB OF ROME IN 2020: „THE FOUNDERS OF THE WORLD RESCUE FUND“
© Philipp A. Schoeller, November 2016
¾ World RescueFund
Natural costaccounting
Naturalresources fund
Green quant. easing
Otherideas……..
Global solarenergy(DESERTEC)
ExtractingCO2 from air(Plant f.t. Planet)
Extractingplastics fromoceans, etc.
Sustainabilityeducation(CoR Schools)
THE BEST WAY TOPREDICT THE FUTURE IS…
TO CREATE IT* OUR CLUB OF ROME
THE CREATIVE CATALYST
32© Philipp A. Schoeller, November 2016
* Abraham Lincoln
APPENDIX
33© Philipp A. Schoeller, November 2016
THE WORLD IS HUNGRYFOR (OUR) ANSWERSWE DO AND CAN MAKE ADIFFERENCE
3434© Philipp A. Schoeller, November 2016
35
CLUB OF ROME: SUCH A POWERFUL BRANDAMAZING POTENTIAL, INTERNATIONAL SYNERGIES“WORLD PROBLEMATIQUE” VS ACTING TOGETHER
© Philipp A. Schoeller, November 2016
36
DID THE STONE AGE END BECAUSE WE RAN OUT OF STONES?
© Philipp A. Schoeller, November 2016
1,000,000 USD?
0.01 USD?
Price of the
last barrelof oil
Source: Alexander Magnint 37
CORPORATE SUSTAINABILTY: WE HAVE NOTHING TO LOSE
© Philipp A. Schoeller, November 2016
Source: Joel Pett 38
A HOAX? IF YES: THE WORLD WOULD BE A BETTER PLACE ANYWAY – IF NO: IT SURVIVES
© Philipp A. Schoeller, November 2016