Table Speech


¡ÈGoing Beyond the Inconvenient Truth: Companies which can or cannot survive in the Century of Environment¡É

July 22, 2009

Ms. Junko Edahiro
Environmental Journalist
Representative, e¡Çs Inc.

¡¡The earth simulator which forecasts temperature change up to 2100 indicates that various risks are closing in, unless we take actions now. These risks caused by rising temperature are wide-ranging, and include famine by decreased crops or spread of infectious diseases such as malaria and dengue fever, once known as tropical diseases. Global warming also triggers change in rainfall patterns and brings the combination of torrential downpour and drought in various parts of the world, causing frequent floods or shortage of water.

¡¡Scientific results show that these risks intensify dramatically if the temperature rises 2¡î higher than the level ¡Èbefore the industrial revolution in the early 19th century.¡É Ever since the industrial revolution, mankind has mined coal, oil and natural gas and kept emitting CO2 into the atmosphere by burning them.

¡¡Global warming is already happening. According to the latest report by ICPP (Intergovernmental Panel on Climate Change), the co-winner of Nobel Peace Prize with Mr. Al Gore, ¡Ètemperature on the earth has already risen by 0.74¡î¡Éas of February 2007. The report predicts that ¡Èaverage temperature will rise by 4¡î (2.4-6.4¡î) if mankind continues to depend on fossil fuels and pursues high economic growth. However, a conscious collective effort to limit the impact on the environment of economic activities could contain the rise in temperatures to 1.8¡ëC (1.1-2.9¡ëC).¡É We have a responsibility to future generations to reduce current CO2 emissions.

¡¡There are two inescapable imperatives. First, CO2 emissions must be reduced and secondly lifestyles must change now in anticipation of further global warming. We can no longer afford the luxury of erecting new houses, factories or offices based simply on the convenience of their location. Henceforth their location and design must take account of risks such as abnormal rainfall, lowering water table, and liquefaction in the case of earthquakes. Today, heatstroke is increasing rapidly and we must take preventive measures.

¡¡Unfortunately, CO2 emissions have been rising at an alarming level in recent years. How can we reduce CO2 emissions and stop global warming? The seas and forests have natural capacity to absorb CO2 in the atmosphere. Forests absorb 900 million tons of CO2 and the seas absorb 2.2 billion tons, totaling 3.1 billion tons per year. However, this is less than half the 7.2 billion tons emitted by fossil fuels. Ways must be found to reduce the latter to the former level. Scientific data has encouraged countries to set CO2 emission reduction targets by 2050. France aims for 75%, UK for 80%, USA for 80%, and Japan for 60-80%. Companies are encouraged to set their own goals and numerical targets, based on the inter-governmental agreements.

¡¡As we face global warming, lifestyles around the world must adapt to the impact of measures such as emissions trading for countries and companies or carbon tax for citizens. CO2 has come to carry value in itself, serving as the third currency.

¡¡Companies have used the index of ROE or ROI to evaluate their business performance. From now on, the new index called ROC (Return On Carbon) will be added, which adjusts operating profit for amounts of CO2 emissions. ROC index is already being used in company ratings, making companies with less CO2 emissions more competitive. As global warming continues, the benefits to companies of investing in energy-saving equipment or using natural energy will become self-evident, both in terms of their survival and customers¡Ç acceptance of their products.

¡¡Touching upon genuine happiness of mankind, let me introduce the index called ¡ÈGPI (Genuine Progress Indicator)¡É based on the calculation of ¡ÈGPI = GDP - (negative factors, such as crime, pollution and family breakdown etc.) + (non-economic activities, such as housework, childcare and volunteer work etc.).¡É Traffic accidents, injuries and environmental destruction, all of these negative factors do not lead to our happiness. We need to address the paradox that raising GDP per capita is not necessarily accompanied by people feeling happier and in fact the contrary can be true for many people. The world¡Çs resources are finite and this requires wider recognition when concepts such as human happiness are considered.

¡¡Bhutan can set a good example. This country bases its policy making and decisions on GNH (Gross National Happiness), with the goal to increase happiness, satisfaction and liveliness among its people. Countries and companies can both learn from Bhutan, to shift their paradigm based on the objectives of how to create genuine happiness.

¡¡Global warming can be interpreted to be the greatest opportunity for us to make desirable changes towards achieving a truly sustainable society which creates genuine happiness within the limits of the earth.