While 40,000 delegates met for COP26 in Glasgow on Friday 5 November, Jeff Bezos, the founder of Amazon and Blue Origin spoke at the Ignatius Forum in Washington, DC about his vision for humans living and working in space colonies because the home planet, Earth, must be restored and protected.
According to Bezos, it’s not that we give up on Earth. We will build large, many mile long colonies, with their own ecosystems, including rivers and forests, using resources from near Earth objects such as asteroids, close enough to Earth that we can visit this uniquely precious, blue planet. In centuries to come, when large numbers of people are born and live on these colonies, they will visit a restored and protected Earth the way we visit Yellowstone National Park today.
Back in Glasgow, the number of fossil fuel industry delegates at COP26 outnumbered those from any single country. And we can be quite certain that the fossil fuel company of tomorrow will, if it survives, look nothing like the one of today. According to RethinkX, we are on the fastest, deepest, and most profound disruption of the energy sector in over a century.
By the end of COP26, the Glasgow Climate Pact requires governments to revisit and strengthen their Nationally Determined Contributions (NDCs) in time for COP27 in Sharm El-Sheikh, Egypt, next year, because current commitments are far short of what is needed. We are currently on track to overshoot the agreed target of 1.5C by far, possibly reaching a catastrophic 2.4C by the end of the century. If the world wants to limit global warming to 1.5C by 2030, the world will need to additionally reduce emissions by the equivalent of two years’ current annual emissions. If the goal were 2.0C rise, then the equivalent additional reduction would be one year’s total emissions over the next 8 years.
While RethinkX predicts that “it is both physically possible and economically affordable to meet 100% of electricity demand with the combination of solar, wind, and batteries (SWB) by 2030 across the entire continental United States as well as the overwhelming majority of other populated regions of the world”, Jeff Bezos thinks that our power consumption can only be satisfied and the planet protected if we start to generate power and move heavy industry into space. That is why Bezos is banking on Blue Origin to become the gateway for moving millions of people to live and work in space in the foreseeable future.
One certainty: radical transformations
Whichever way it goes – whether we manage to decarbonize by 50% in the next 8 years or not, if the developed countries muster the will to pay the promised $100billion per year to assist developing countries with the transition that they have largely caused or not – once we combine the accelerating climate change, the loss of biodiversity, the increase in computing power, the innovations in nano-technology and robotics, biotechnology, and other fields, we can be sure that the near term holds the kind of transformation not witnessed before. And since we are dealing with many inter-related complex systems, we also know that the change will be very unpredictable. Some actions will have large, magnified effects, others minute; they can emerge close to where the action took place, others far away; sometimes immediately, sometimes with great delay.
What does it mean for those who govern?
Governing bodies across all types of organizations need to transform the content and process of governance as fast as they can. Their organizations will be rattled by the storms of change. Some will thrive in the new environment, if they are agile and governed in an integrated manner, because with change there are always many new opportunities.All organizations will face new risks. The chart on climate-related risks, opportunities, and financial impact developed by the Task Force on Climate Related Financial Disclosures (TCFD), four years ago, is very useful for mapping some of the risks and opportunities. At the same time, it is already outdated, because one of the significant developments coming out of the Glasgow Climate Pact is the agreement that we need to think, act, and account in far more integrated ways. Modern governance is based on integrated governance frameworks that bring the fulfilment of the organization’s purpose together with the regeneration of all the capitals that contribute to value generation in conceptual ways, as well as, throughout the organization – including products, brands, risk governance, oversight, and accounting. Such an approach to governance is radically different from some of the dangerously outdated governance approaches still being promoted today.
There are still many boards, where climate, adaptation, or other aspects of ESG are not yet discussed at every board meeting. But even where these topics are already at the forefront of governance, strategy and decision making, outdated and unreliable data that is manually collated on spreadsheets is still being used, even by large multinationals. According to my colleague at ISO and Syntegra-ESG’s strategic business partner, Peadar Duffy, who is the ESG Solutions Lead at Archer Integrated Risk Management (ArcherIRM), the days of manual spreadsheets are rapidly coming to an end.
Once the IFRS International Sustainability Standards Board (ISSB) becomes operational next year, and global ESG disclosure standards are issued, disclosures over vast amounts of data points will soon be required to be machine readable in standardized format (XBRL) and connected to source data. Limited assurance statements will soon follow, and well before 2030, board, shareholders, and other stakeholders will be able to draw on audited reasonable assurance. This will not be the end of the journey, by far. What makes the difference will not be ESG data or conformance with more or less meaningful standards, but how boards and management integrate the information and make materially important, innovative decisions that transform business models, and provide the solutions that people and the planet so desperately need.
This article is part of the "Purpose with Profit" Column and an earlier version was published in the business section of the Newsday (Trinidad & Tobago), Business Authority (Barbados). our.today (Jamaica), and The Voice of Saint Lucia in November 2021.