 Last week I was in India, and in India you can meet incredible people and incredible entrepreneurs. You can also meet incredible poverty, but last week I met some incredible entrepreneurs, and one of them is building a city called Gift, like as in Gift. That city is going to host or be the home for six million people, and he's building it as an entrepreneur. I don't know if it's Dotchi or not, he made a deal, he got a plot of land from one of the states, and he's building the city. And he's saying this is going to be the first modern city. It's going to be the most sustainable city in the world, that's step one, but it's also going to be the first modern city that will have a soul. So that's why I thought I'm going to do. My key advisor told me not to play music at Cambridge University, but here you go, that's what you do to advisors. Anyway, I need to warn you, I am Dutch, which is not far from here, but there's a channel in between, and it's like, I don't know what's in the water, but the wrong end of the water comes on our shores, I can tell you. So what does it mean? Dutch people are very low on diplomatic skills. They sound like communists to most of you, and their ability to say things in a somewhat polished way has never really been fed to them. So I apologize if I insult any of you. I apologize for my broken English, I apologize for all that, but I can't help it, and I'm not going to change it either, I'm too old for that change. So you're just going to have to live through it for a whole hour. This is going to be your big problem. And I use swear words I get going, so I apologize. I don't think that's necessarily Dutch, that's just me, Rot, is it? Anyway, man, here we go. So tonight I'm going to talk about the revolution of capitalism, which is a nice communist way to start any presentation. Again, my advisor had put the R in between brackets so that you could think it is about the evolution of capitalism. That's bullshit. We're going to go revolution, because we're in a hurry. So I'm Peter, I used to be the CEO of TNT, which is one of the greatest companies on the planet. And in 2008, I flew out to Seattle. And some of you will, many of you will not know, but in Seattle is the head office in the main manufacturing line of Boeing, the aeroplane machine builder company thingy. And we picked up our own Boeing 747. Are there still people in the room who dream of buying porches when you grow up? It's not very popular anymore in the sustainability space, I know, but in my life, when you started careers as a student, your dream was I'm going to make a career and then I'm going to buy a Porsche. And I made that career and I did buy a Porsche once, stupid, but I did. And I still remember the moment that I went to the Porsche dealer to pick up my Porsche. I was like, wow. Anyway, imagine that feeling, but then on a slightly bigger scale picking up your own Boeing 747 in your colors. Hey, if you want to talk toys for the boys, that is like a big toy for the boy. Anyway, I still have the leather jacket in my house because it's an amazing moment in life. But then I did put the sustainability lens on this same beautiful machine because TNT, I've always said, TNT is a great example of a company that is a beneficiary of globalization. Because what is globalization? Globalization is that, I don't know, this bottle of water you can buy anywhere in the world. It is very possible that you're in a meeting in China and Hilton water will be served for some stupid reason. But the same, you know, every suit, every shirt, anything you can buy in England, buy in China, in Brazil, wherever you are. And most of these products are being produced in one or two places, and therefore they have to be shipped all across the world, and that is what machines like this do. So this is a machine which we, at one point in 2009, had two of these machines in TNT. And these two machines would fly nine rotations per week between Europe and China. In TNT we had our own airport in Liash in Belgium, and we would fly the machine to Shanghai, empty. 40, 50% full, which for a transport guy is empty. And then it would land in Shanghai, we would get the stuff out, and then we would fill it with iPhones and iPads and all the other beautiful stuff that is being produced in China. And on most flights back the capacity would be 99.9% full. So an amazing extension of a supply chain in the form of a beautiful baby that can fly around the world. So TNT was a large company, like 175,000 people, 35,000 trucks and vans. They're very big here in the UK, you can't have missed the logo. So 35,000 trucks and vans running across all of Europe trying to deliver these parcels and freight and whatever is in there. Two Boeing 747s doing nine rotations a week together, so each does four and a half trips, emit more CO2 than all 35,000 trucks and vans in the same week. And that's a very interesting perspective of globalization because globalization is cool, the toys for the boys moment, all that stuff. But the extension of supply chains all across the world is such an amazing phenomena when you look at it from an emissions point of view or therefore energy consumption point of view. And somewhere along that journey I really woke up to sustainability in TNT. We did all kinds of things, world food program and stuff. I'm not going to talk much about that tonight. And I met the power that business has when the energy of sustainability gets introduced into it because I've seen no better instrument in the company to motivate, inspire or make people proud of the company than the sustainability work we did. No bonus scheme, no nothing could ever create the same amount of excitement, but I've also seen the limitations of where business is stuck in the system because three, four times a year as a CEO you were sent on roadshow to beautiful cities like London and I can tell you that's where the bad people live. You think it's Wall Street but the city in London is worse. Anyway and then you would be beaten up four, five, six days in a row about minute operational details to do with your EBTA and your cash flow and all these other great concepts and you could win any price you would want to win in the sustainability space and in one hour of a conversation you would not even get a minute of time to talk about it. The one quarter when everything was going for us in TNT I did get twice in a meeting the opportunity to talk a little bit and then they said well this is not really relevant for your performance, is it? So that's where I see the opportunities in business and I saw the limitations. So then I turned 50 which is for the first few rows here is completely alien concept and I don't even imagine how it is. The only way to convince yourself you're young is to play music when you start talking to people but for the rest it's all going downhill really really fast. But for some of the others in the room who've been there it's one of those moments in life that you think jeez what is life all about? I'm gaining all these experiences, I'm having all these opportunities when you're the CEO you have loads of opportunities and loads of experiences but what purpose does it serve and what is happening in the world around me and am I in the position where I can make a real impact? So I decided that I had enough of running companies and I got out and I moved into WBCSD which is the World Business Council for Sustainable Development and tried that for your job interview. It's an amazing, I don't know who made that name up but it's not high on the list of priorities but one day. Anyway like was said it's a group which has been in existence in different forms and shapes and sizes for about 20 years. It's a collection of some of the largest companies in the world and 100 members, it's a member-based organization so it's a business membership-based organization exclusively focused on sustainable development. So we don't talk world trade, we don't talk economy we just focus on sustainable development. And we do that together with these companies there are great names on it, there are some dodgy names on it as well. There will be companies who truly lead the change that the world needs and there are companies who are just there for the logo. Like in any population you will see this and over time as we start turning up the sound of the music we're playing we will clean that up and we'll make it a truly progressive voice of business that the world needs. But this is what it is, so it's many sectors, many geographies some of the largest brands in the world that take sustainability seriously and have decided long time ago to come together to create initially, like Paulie said, awareness. So our library and our website is filled with documents and some of them are ultra cool deep thinking. It's good stuff that has been produced. But when I came in I said the world of sustainability has by now written down everything that needs to be written down and I'm not claiming WBCSD was the author of all of it but if you look at all the institutes that think about sustainability in the world most things that the world needs are by now written down. What the world is extremely poor in is how do we implement these great ideas and that is where the next challenge for WBCSD but I would argue for society as a whole lies. So next to these members we have regional networks in now 64 countries. So in almost all corners of the world you will find local WBCSDs which will have local members, sometimes subsidiaries of large multinationals but in many cases national companies. So this in my mind is what I call the Army of Implementing Solutions 64 countries, thousands of member companies spread across the world if we can get solutions to be implemented in that scale we might reach an acceleration of change of the world. So this was the machinery that I'm now playing with. Let me say a few words about my talk. Again just to warm you up or to put you asleep whatever you feel more comfortable with doesn't matter. But also to warn you where the communist part might actually come in and then just you know you do is it what you like. So I'm sorry it's my own thinking here so you know I'm Dutch and I'm not an academic so I'm limited in certain skills but I try okay I did my best. We're here in the engineering department right? Am I not dick? Yes dick. So in the engineering department you guys will think technology will save the world otherwise you wouldn't be an engineer right if you don't think technology can do it and why the hell are you studying technology? So there are lots of people who think technology will do it and therefore you guys are the people who are going to have to get our planet out of trouble. There are other people who say well technology may be or maybe not helping us or maybe working against us whatever perspective you want to take but unless we change behavior of business, of government but also of individuals you and I and all of us we're not going to make it. And I've called that the axis of engagement if you believe that technology will get us out of this trouble then you're wasting your time here tonight. We're just going to let you guys get on with it invent the best technology and we'll hear when you're ready to implement. If you believe that's not the model we all need to change then we need to start taking it more personal than we do today. And truth and reality is never on one axis it's probably a bit of everything but that's one way to position how you mentally think about this type of things. The other axis is about urgency. There are people who say you know 20 years ago business had no idea what sustainability was 10 years ago when CSR was invented it was still a little bit strange if you had a CSR program today there is no serious company anywhere in the world who is not publishing a sustainability report or has a sustainability officer or talks about sustainability somewhere in their strategy. So we're making massive progress give it another 10 years and business will find a way to solve this. The other people say well hang on we've been going at this for a little while and all the trends are still moving in the wrong direction so yes there may be understanding but we're not very effective and depending on where you are there you think this is more or less of an urgent issue. If you're in the what is it for you bottom left you think the world is coming to an end we must mobilize everybody and this is a massive undertaking if you're in the top right you think we're almost home. We made great progress and technology is around the corner so it's not as big an issue and I think this is probably if you plot we're not going to do it we don't have time but if we would have a technology in this engineering room of yours where everybody with a laser point could say where they are you would get a very interesting picture and that picture would completely determine what you think of what the communist is going to say next if you're in the bottom left you love the communist and the more revolution the better if you're in the top right you think the guys should not be here who invited this man kick him out of this room so I wish the ones who are in the top right a great evening if you want to leave I'm not offended I'm Dutch I'll say one or two nasty things on your way out but that's about the worst that can happen to you please feel free to leave now let me talk about the state of the world so sustainability is not new by any means sustainability was probably first made into a big global discussion by the Club of Rome in 1970 they published a book called The Limits to Growth the book has been redone or updated a couple of times since and every time we updated the original turned out to be pretty accurate projection where resource constraints in particular would become troublesome in 92, so 20 years later the world under the UN for the first time met in Rio and that was the first of the Earth summits and in that meeting there was a document agreed between all governments of the world and this was called Agenda 21 and I don't know how many of you have ever done that but if you download that document today and you read it you'll be amazed how up to date that document is the issues mentioned and identified there are still the issues today arguably the only thing that has changed is the urgency of all these issues has gone up tremendously then 10 years later Job work 6-7 months ago, June last year there was Rio plus 20 again Rio de Janeiro, again UN Earth Summit 55,000 people met for almost a week to talk about sustainability and after all that talk they produced a document called The Future We Want can I see a raise of hands of who have written it from cover or read it from cover to cover that's encouraging well you've made the right choice because you would have wasted your time it is a complete non-committal document it's not worth even reading the executive summary and what is very interesting from Rio 55,000 people, serious people government leaders, Mr. Banke Moon 1300 business leaders were a part of that 55,000 were having their little meeting 12 kilometers down the road there was a thing called the People's Forum did any of the young people go to the People's Forum? that's disappointing guys you should pay attention to those are cool meetings so there were 12 or 18,000 I forgot the number now but mainly young people having their People's Forum having an alternative Earth Summit they didn't publish anything but they were certainly energized to change the world so the conclusion is we're taking this serious at the global level I don't know how many but more than hundreds of thousands of people spending their days full time thinking about sustainability there's lots of people and some of them meeting these meetings so what happened in the last 40 years since we put all this energy into it well to be honest not much we live in a world where every six seconds a child dies from hunger so now another child has died and now again every six seconds a child dies 18,000 children die each day from hunger and there's enough food in the world to prevent that so if we're so fucking serious about sustainability why can't we even keep these kids alive and every 12 seconds a child dies from lack of sanitation or clean drinking water every three seconds a girl under 15 is forced into a marriage it's real progress so anyway that part of the agenda hasn't really worked the damage to nature is unmeasurable there's no slight on it yet but carbon emissions is a cool one carbon emissions are going up and up and up so they need to come down and down and down but they continue to go up you are all in the engineering department you like building stuff 1300 coal fire power plants are being built at this moment in the world did you hear me 1300 coal fire power plants are being built in the world as we speak none have CCS carbon capture storage which is 40% of the installed base of coal fire power plants is being added as we speak about sustainability we're not on any trajectory to make less CO2 into the atmosphere we're only accelerating so in the world what happens all the governments of the world meet and they talk about climate change agreements Kyoto and successors to Kyoto the whole purpose of that whole circus is to limit the warming of the planet to 2 degrees that's the officially stated just about acceptable warming this planet may have nobody knows why that would be acceptable but we've agreed that that could well just be acceptable the IEA has published a report last year November 2011 saying 2 degrees is not obtainable we're looking at 4, 5, maybe even 6 degrees World Bank has published just before though I think November December last year 2 degrees is not obtainable 4 degrees is the minimum so we're looking at a world that is going to get seriously warmer and we're still not slowing down the emissions and of course one of our big challenges is the continuous rise of population I won't bore you with all these stupid facts that how many people were on the planet when I was born we're at 7 billion people today we're going to go to 9 plus billion maybe 10 billion people by the time it's 2050 which is one thing so we're going to have to feed another 3 billion people most of that growth is happening in areas which today we would call the developing world so when poverty eradication is already a stress item it will only become a bigger stress item because that's where the growth is going to happen England, Europe, America doesn't see much population growth other places will the second concept underlying the population trends is that today in the world we have 2 billion middle class consumers probably most of us in this room qualify for that bracket those are the people who buy cars, who buy refrigerators coffee machines and all the other stuff that we like to collect in our lives in this period, 2050, the 2 billion will become 5 billion middle class consumers that's great for business I happen to sell coffee machines I'm going to sell twice as many maybe more coffee machines but that's where the resource constraints will really come and bite us so you guys probably have heard of the footprint that we currently use in the world humanity today uses 1.4 planets each year already today if we go from 7 to 9 billion if we go from 2 to 5 billion middle class consumers we are going to use between 3 and 4 planets I once met a guy in China an older gentleman who thought I was completely crazy talking about these things he said well we will invent a rocket that will bring us to another planet I had not read the manual for that statement yet and maybe there are more planets I don't think so so we have to do with this planet and I think about this planet which is the first communist statement of the night space ship which is not an inappropriate name for it if you ever slept under the stars in an area which is not polluted by light and you wake up a few times during the night and you see how this whole spaceship is circling through a much bigger space with lots of other lighting balls up there this is what it is so we are all astronauts on our spaceship and the ship is all we have so when WBCSD a few years ago wrote a book called vision 2050 it basically predicted that the first 10 years after that book was published would be the turbulent teens so let me take you through that this is the first thing actually that I did when I joined WBCSD a bit more than a year ago I had great writing books about turbulent teens but how turbulent are they so I took pictures of the last 12 months from around the world well firstly the economy is in deep trouble started in 2008 with the financial crisis rolled smoothly on into the euro crisis and is now spreading and infecting the whole world economy it doesn't matter which statistic you look at bankruptcies in most societies are higher than ever and continue to rise unemployment factory closings are back into the news people protesting against it but also more mundane issues like the commodity food prices are rising again which for you and I is an irritating 10 cents more for a box of rice in the supermarket but if you have a dollar a day to live off there is no difference between a meal or no meal so the economy is clearly under a lot of stress if that was all there is the weather that we need to deal with and it doesn't matter where you look the monsoon in India which is not producing the rain it did rain in parts of Africa has moved 4 to 500 kilometers north so basically the areas where there was agriculture the areas where there is no agriculture is where the rain is falling so patterns are shifting of course Sandy is a great example sad for the people who are from New York who lost relatives or possessions but it's a good wake up call for the western world that this will be coming ashore the saddest story of all stories this year is about Greenland I'm just repeating the lectures you guys get every day but I'm going to give you a one liner anyway so Greenland this year for the first time is defrosting for 100% so it has never happened before Greenland we saw Greenland melt on the edges for the last few years already but this year in the summer for the first time the whole surface of Greenland was in a melting process I'm not saying all the ice of Greenland has melted because then we would not have been sitting here we would have been higher up in the building and we would come to the university by boat but for the first time all of the surface was in a melting process some of you are familiar with ice are not if ice is frozen it's white if it starts to defrost it turns to light gray to dark gray and the next thing you know is you see a puddle of water that's the process and for the engineers that's called the albedo effect of ice you can forget all this noise it's just to fill the time anyway when ice is white and the sun beams its energy on it it bounces back just like a mirror on the Arctic on Greenland 84% of the sun's gets bounced back into the universe when it goes light gray dark gray or water it starts absorbing energy in the state of Greenland this summer it was only bouncing back 57% so it was about 30% spread between not bouncing and absorbing what does this mean Greenland this summer listen up not Greenland 10 years from now in a maybe correct scientific model no Greenland this summer has absorbed more energy than the USA consumes in two years so did you hear me twice as much energy than the USA all of the USA cars, buildings, factories whatever they're doing twice as much than the USA consumes in one year has been absorbed by Greenland by the albedo effect of the change of color of ice and so now you begin to see that the world is beginning to work against us and this is what scientists planetary scientists will call tipping points and then all of a sudden you get an acceleration in processes of defrost and all the other stuff this is scary stuff so the economy is in the dumps the weather is clearly beginning to play tricks on us and some of the things might be indicators of tipping points and if that was not enough let's look at the way we treat each other in society and there is almost no place in the world anymore where you cannot or where you can see cannot see whatever proper English is social tensions on the rise anywhere whether it's the Arab Spring whether it's the massive protests against youth unemployment in Spain whether it's the 100,000 Japanese people Japanese people do not protest but there were 100,000 people protesting against energy policy and nuclear energy whether it's the EU whether it's Occupy whether it's South African mining whether it's Indian rape cases everywhere you see the social tension rising so we have what I call an incredibly toxic mix of economic, social, and climate or planetary stress points working into one big pot of crises and I am not intelligent enough to explain you the interdependencies but I do know intuition can make you know things whatever that there are lots of interdependencies and so we go to all these meetings in Rio and in Doa and in Hyderabad and wherever the next ones are and governments at this point in time are not capable of coming to solutions think about it in this way we've created a world where we clearly are dealing with a global emergency and forget the social economic just take CO2 for a second now CO2 the atmosphere does not care whether it's a Dutch car, an English car, a Chinese car or some other car emitting CO2 it just goes up in the atmosphere it gets added to the stock of CO2 and that is causing the eating of this planet and this global emergency we are dealing with a system a governmental system where 193 countries have to agree every word before we have an agreement and that's at the moment just not working so the UN process is dysfunctional most national governments are focused on short term pension house markets, economic type of issues so they are dysfunctional the only level of government that is somewhat working at the moment is city level and I'll come back to that a bit later so if that's the case then where do we turn for solutions and of course I would not be with the world business council for sustainable development if this would not be my answer the only force in the world that is powerful enough to make a change at a scale that we need is business and here is where the people who were kind of disengaged with the communists are getting a bit confused in the story because how can a communist be preaching for business this is like a weird man business will have to take the lead and save the world which is not the same as saying business will save the world on its own it can't be done if there is one word that we all need to remember from this story is it is going to have to be collaboration it's going to be academic, it's going to be governments it's going to be NGOs, it's going to be consumers and it's going to be business but business has the power the technology, the innovation, the management skills the finance to take the lead and that is what business should be driven to do and that is what the world business council is set up to try and get done so this world business council has written this vision 2050 I sometimes say this is the definition of sustainability so if you were to do a poll in this room and you would ask people what is sustainability I would get whatever amount of people are here but 50 different answers for sure this is our answer sustainability is all about 9 plus billion people living on the planet they must all live well so education, healthcare, food whatever at affordable rates and together we must get back inside the boundaries so we cannot continue to think we have three planets we need to live on one that's the definition of what sustainability is all about to get to this vision we have argued in this document vision 2010 that we need to go for a radical transformation let me be extremely clear to all of you you cannot save the world through incrementalism there is lots of incremental things we can and should do to make the world take a little bit better but we are not going to save it we need radical transformations let me give you another specific you cannot save the world based on business cases there are lots of business cases that are flying particularly around fuel energy or energy efficiency or resource efficiency lots of things what we call low hanging fruit that business and government should do today and make sense and save money but there are not enough business cases to save the world so we have a systemic problem it's going to be the argument and to break through this systemic problem we need to get to a radical transformation where things are different whether it's zero net energy buildings low carbon mobility you take anyone zero waste circular economy all these concepts at the same time need to be implemented in the next few decades this is not about incrementalism because in all these 40 years that the world has been focusing on sustainability in all the 20 years that WBCSD has been playing around sustainability there is one remarkable conclusion everyone of the planetary boundaries is trending in the wrong direction nothing is trending in the right direction there is one planetary boundary success which has I think it must have been 15 or 20 years ago is the ozone layer that's the only one we've been able to successfully change the course and the trend all the other trends are going in the wrong direction so what are we at WBCSD going to do and where do I think you guys with all your brain power and your incredible institute here in Cambridge ought to become helpful I do not care about 2050 I'll be long gone and dead certainly not playing music at least not in this world so I'll be gone and it applies for lots of people in the back of the room as well maybe they'll invent pills and keep us around but that won't be really sustainable so I'll probably refuse to use them by that time anyway what I do care about is 2020 because 2020 I might still be in this job I might still be vital who knows what happens but many people who are currently in boards of companies can be interested for 2020 it's not next quarter's budgets or results but it is within reach of making it part of a legacy of a leader that's what leaders think about legacies so what can we do between now and 2020 that's going to get us on this trajectory of the radical transformation that we need and we've called that the must-haves and so in this book, Division 2050 you can't read it and I don't want you to read it because most of the stuff on there is cool on t-shirts but you can't do much else with it so there are 56 must-haves things the world must have done by 2020 in order to get to a trajectory of reaching a sustainable world in 2050 we need priority setting in this so that's what we're going to bring and for that we're beginning to link up to scientists the best model we found so far on the planetary side on the environmental side is the thing called the planetary boundary framework I think it's being taught here as well so you may have heard of it or you may have even studied it for those of you who didn't it is basically a collection of all the climate and environmental models and scientific knowledge in the world put together into a dashboard I call this a dashboard that kind of shows how is the planetary stress in our system doing so you see nine elements climate change, ocean acidification global fresh water, whatever it may be and you see red bars coming out that's where the stress in the planetary system is highest where we are breaching the boundaries that scientists think are safe for us to reach so it's clear the world always talks about climate change as being the biggest problem we have and it's true, it's three bars up and it's a pretty hot issue but if you look at biodiversity laws so extinction of species soil degradation, those type of things that's by far the most serious problem we have secondly, nitrogen cycles mainly to do with fertilizers groundwater pollution, that type of stuff it's the second biggest problem climate change, the third fresh water, people always talk about water as well water is an urgent issue but it's different from all the other issues because it's a regional issue it's not a global issue, I mean England probably has had too much water in recent years Switzerland where I live never will have a water problem but if you're in China, if you're in Shanghai or if you're in Northern India water is already very, very scarce and water has to be transported over ever longer distances to the people so this is a framework for the planetary side I wish I could show you a similar cool picture for the social boundaries but it doesn't exist you know, it's remarkable that I think it was in November, October last year a typical capitalist magazine called The Economist based in this beautiful city of London around the corner said that inequality has overshot its purpose their argument was inequality in a society is not necessarily bad, you know it gives people dreams and aspirations and that moves the whole thing forward but if the difference becomes too big then it starts to become counterproductive and their argument is we have now reached that point within countries the inequality of income has become way too big but also across the world the inequality has grown to be counterproductive and social issues are not only around inequality or about poverty eradication if you talk to a business person which I get to do a lot is eight and a half weeks ago 151 girls in Bangladesh lost their life in a sweatshirt which went on fire when it was investigated shirts what's called sweaters I don't know how you call that stuff pullovers were being produced for a company called C&A I don't know C&A are they still here in England they used to be but maybe they withdrew but they're a big retail chain Germany, France, other places where they sell beautiful clothes and they're a remark of their family owned company the management is really into sustainability but when I said sustainability is managing your value chain all the way down to the sweatshop in Bangladesh they had to swallow a bit and after the incident of course they agreed but before that they had not paid the attention and that is what we need to also start doing there's one other topic to which I've come as far as making a beautiful PowerPoint slide out of it well the reality is I actually built them in keynote on iPad but the university does not cater for that yet so we turned them into power anyway so all I have said so far is complete bullshit unless we fix this and the same by the way applies to India and Indonesia and Brazil and those countries because we can do all the technological efforts we want to get England to be a green country or Europe or America or whatever we're going to cook up but if the Chinese people are going to adopt the American dream or if the Indian people are going to adopt the American dream there is not going to be enough resource or not enough space in the atmosphere for the emissions that that will cause this is a crucial item that needs to get on the agenda and it's a very very difficult agenda item because you don't want to tell the Chinese Indian or any of the other people you cannot have a car and we've polluted the planet sorry you go on a bicycle that's not going to be the winning message but what is going to be the winning message is an interesting one technology will help here India is a great example in India you will not find almost not find any fixed line telephones because they jumped straight to mobile telephony can we get them to jump straight into the next generation of energy or mobility or buildings that's a crucial question that the world needs to answer anyway we will throw all of this in the mix use science to drive priorities refocus vision 2050 and by October, November this year we hope to publish what is going to be the global business agenda for action in sustainable development and behind that is going to become a measurement system so we're going to measure whether the world is actually now getting serious about implementing because we need action and maybe there's people from business who already take sustainability very serious maybe you have heard of showcases or pilot projects all the CSR projects in the world today are not enough to get the trends in science to move in a better direction so we need to think only about one thing and that is how do we scale all of this up because we know there is technology there's lots of technology there's lots of ideas but we can't get them to scale yet so let me talk a little bit about that and for the students this is an important phenomena to understand because whatever company you're going to work for just ask yourself where on this journey is this company and do I want to be part of that part of the journey or do I want to be on another strand for the people who may be in business just think about where you are going to take your company so I always say the lowest level of sustainability thinking is denial you know this old bullshit there is no climate change it's solar power nothing to do with human interventions business is just here to make money to create share all the value that's the lowest level of and you'll be surprised how many believe that then the first step in the journey is well okay business shouldn't do harm and we should be a little bit thinking about integrity and so then you talk about principle based business ethical based business even and you go to the global compacting you see ten principles of what we think is good behavior the second step is once you've made that step you say well we should really give back you know we make so much money we should give back so you go and partner with the world food program like I did in TNT or you go take care of the community around you whatever it is but you connect the business somehow to some kind of a good cause that's great every business should do some of it but I guess we will agree it's not going to save the world the third bit and this is getting closer to home we need to start thinking about it in terms of risk management we need to today I mean are there any accountants in the room I just won cool so anyway inside governance of business there's a paragraph which is called risk management in which the board of a company has to disclose how likely is it that business will survive what are the risks and all of these risks are in words of financial risks there are no risks related to sustainability yet we need to change that sustainability whether it's weather events or any other risks are going to infect the ability of business to go on the fourth step is we need to integrate sustainability in our strategy in everything we do the best example in the world today is Ikea the furniture company may have heard of him they published their sustainability strategies eight weeks ago, nine weeks ago it's called People Planet Positive they're not a member of WBCD so I'm not promoting my own members here People Planet Positive you can download it on the web People Planet Positive PDF and it comes in three objectives for 2020 number one Ikea will be energy independent by 2020 meaning Ikea will produce more renewable energy than it consumes in all of its operations these are great words it's an extreme variation of saying I will green my operations I'll be one of the good guys the difference with Ikea is last week they have issued the press release they will invest four billion dollars in solar panels on all the roofs, on all the stores worldwide so they're serious number two objective we will make the lives of all people in the value chain of Ikea better so not just 100,000 employees of Ikea but everybody all the way back to the people who make their raw materials they will make their lives better by 2020 third objective we will inspire and facilitate millions of people to make their homes sustainable this is new boundary my leader so far talked about we're gonna make our business sustainable or we're gonna reduce our energy footprint or whatever but these guys our energy will be neutral value chain will be life better and all our customers will get to a sustainable house through us so what are ways to scale up this is interesting to study and to think about where you want to spend your lives if you want to have impact because I would hope that all the students here in the room only think about one thing and that is where the hell am I gonna have impact you're not studying this for a job or for an income you need income, you need a job I know but you need to have impact more than anything these are the mechanisms for scale up so individual companies can race through this journey that I just showed from principles to philanthropy to integration within sectors we can collaborate there's great examples Cambridge is involved in a few WBCSD does a lot of work with cement companies forest companies we bring one sector together and slowly but certainly we raise the bar of being more sustainable we can work cross sectors value chains so Puma is a great example they have looked first at the pollution in their factory then they went down their value chains they found at least 30% more optimization and lastly we need to change the rules of the game that's what I said earlier there are not enough business cases to save the world so let's go there I have to admit you probably saw by the funny dress I am a capitalist I told you I was a communist but not really the funniest thing I did in my first year in this job nobody knows where it is but it's south of South Korea there was the World Conservation Congress 7,500 thousand conservationists were there most of us would call them hippies I know there are some people with long beards I don't want to offend you but I'm Dutch so I told you but I would call them hippies anyway so there were the first opening day I was the first business person ever to talk to the World Conservation Congress so you know you're a Dutch guy 3,500 people in the room bit nervous so I woke up and I said good morning I am a capitalist jeez was I happy I did not hand out tomatoes when these people came in but let me explain to you because not everybody knows what a capitalist is what is capitalism a capitalist is somebody who puts capital to work and he wants something back he has capital puts it to work, wants something back so that's why a capitalist says there's a return on capital employed that's capital to work wanting something back that's great, that's capitalism the mistake we made in capitalism is that all we do is we measure and we manage and we optimize the return on financial capital that's all we do we do not care about anything else but return on financial capital Rokey it's called and that's a big mistake but that's how every business school in the world trains its students share all the value thinking return on capital thinking it's always around financial capital and what we should do is think more carefully because we use nature and that's a capital and we use people in value chains and that is capital social capital so the world we're gonna move to is a world where we will change the rules of the game where a capitalist will not manage just financial capital but will also manage natural manage natural and social capital and optimizes the returns across the three that's what I call a revolution of capitalism or if revolution bothers you because it's identified with bricks and fire bombs evolution I'm happy to but it's gonna be a revolution you know what the beauty is about English not being your own language if words get a little bit difficult you need to use a dictionary to find out what the hell these words mean I have it all the time you know these days they're on the iPhone so it's easy but if you look in the dictionary what is revolution it is a radical transformation in a limited amount of time sounds pretty accurate to me that's what we're gonna go so what is changing the rules in the game there's lots of experiments going on in competing schools Harvard Michael Porter is doing work on shared value you may have heard of it if you haven't heard it makes for really interesting reading January 2011 Harvard Business Review was a good article to start conceptually very cool measurement wise impossible and an empty shirt so I wouldn't spend too much time on it because it's not gonna fly Puma is by far the groundbreaking company in this space well in English you say Puma but it sounds like puking to me so I always say Puma the way the Germans say it Puma anyway so Puma has done an EPNL profit and loss statement Puma makes 320 million euros of EBITDA of profit and they've taken a 145 million euro of charts for land use water use, CO2 use pollution and waste 5 buckets it's incredibly detailed they have therefore had to price nature which for many conservationists is a holy grail you do not get to price nature but they've done it and they've done it very effectively because what they came to conclude is this 145 million euro of charts and half of it was the result of leather in the shoes so to make leather you need the cow, the cow needs to be on a piece of land drinks water, produces methane and all that other stuff and that was all captured and now they have decided that within three years they will try to replace leather from their shoes by something that is way less impactful on nature and this is a very very interesting example of where business plays the game that they always play, i.e. minimizing the cost, maximizing the profits but now focused on the cost in nature they also are now working on a thing called the S-P&L, the social P&L but just as I did not show you a framework it will take them longer but they're getting there then there is came out of the accounting for sustainability, Prince of Wales initiative now a global movement called IIRC Integrated Reporting International Integrated Reporting Council IIRC.org is it right? I think that's the website, you can download this particular piece of document gives you a very good feel it is a beginning of a revolution, it's not there yet where the where this all will go is this particular slide and since there is only one accountant in the room this won't look like much of a revolution to you but I can tell you, show this to a room of accountants and the place will be shaking not necessarily with a positive vibration so on the left you see what accounting does today it tells you the story about business the risk management framework and then there is all kind of rules on how you actually do the financial accounts I mean I don't know if you have ever studied accounting you should if you want to be in business because it's the language of business but whatever you think of that you will never ever be in a business meeting having a debate about how people calculate their profit never you will never ever challenge that if it's a hundred that's on never there's rules people just do the rules and come to a number and that's the number and then you talk about the number is not good enough but you do not talk about the number as such when a company today publishes its CO2 number in a sustainability report you or I or none of us have any idea how that was calculated what the scope of it was your report your report your report your report there's no way of comparing the numbers because there's no rule on how these people calculated their reports and if we want to measure progress we need to get comparability we need to start saying hey this guy is doing a much better job than that woman what is this woman going to do to improve and then we get to focus in the rules of business but redefine and that's where we are going to go the last step and that's by no means the smallest step is we need to get the capital markets to play as well because the best CEO on this island is a guy called Paul Pullman runs Unilever pretty brilliant sustainability strategy by many in the world seen as one of the most forward thinking business leaders out there member of the high level panel for sustainable development goals doing an incredible amount of work but that person will still lose his job if he has one bad financial quarter we can all agree he's the best sustainability CEO in the world he will still fly out if he does not perform financially so we need to get the capital markets to understand this and that means we need to work with everybody collaborate collaborate collaborate and you will have to remember only one thing from this talk tonight and that is what are you going to do to scale up thank you very much