Global demographic pressures accelerate

Behind the world-wide concern over climate change sit two macro-demographic factors which are well-known but whose continuing and increasing impact is often forgotten: population growth, and urbanisation.

The United Nations has just released new reports on world population which put the challenge in unmistakable terms. The current world population is about 6.5 billion, increasing by sopme 80 million each year. The net increase in population is three per second. The world population is predicted to level out at between 8 and 10 billion people by 2050. Yet even at the current level, it is estimated that more than three billion people are malnourished, with per capita grain availability declining. Half the world’s animal and plant species are harvested for human use, which, when combined with the pressure on habitats, is producing what conservation biologists are calling an extinction crisis. And, of course, it is primarily the energy needs of this expanding population which is driving climate change.

These pressures are multiplied in urban aggolomerations. Half the world’s population now lives in urban areas; by 2030 the figure will be closer to 60%, driven largely by urbanising trends in Asia and Africa. The rate of urbanisation is far outstripping the ability of societies to deal effectively with it. Lack of basic infrastructure, in sanitation and water, vast slum populations, endemic crime and poverty are already more the norm than the exception. One countervailing trend is the likelihood that the mega-city urban agglomerations are reaching maximum capacity; already the frontier of growth is moving to smaller urban populations, of perhaps half to one million, which can be planned for more adequately.

Demographic realities on this scale are clearly of overwhelming importance to every facet of human life. Grappling with them is arguably the task of highest priority confronting the world’s political institutions. As with the linked problem of climate change, the sheer scale and urgency of the challenges may compel the development and adoption of the kinds of global political structures that will be necessary to handle them. One hopes so, as these structures, and the commitment to them, are today tenuous at best.

As an aside, it’s also worth noting the immeasurable impact of these factors on business. Writing more than forty years ago, Peter Drucker, the incomparable commentator on the theory and practice of businesspointed this out in discussing the changes that generate the future business environment:

“The first area to examine is always population. Population changes are the most fundamental–for the labor force, for the market, for social pressures, and economic opportunities. They are the least reversible in the normal course of events. They have a known minimum lead-time between change and impact. . .And their consequences are most nearly predictable.”

[Drucker, Peter F. (1964, 1986) Managing For Results, Harper & Row, New York.]

Report from The Independent on world population link here.

Report from The Guardian on world urbanisation link here.

Financing redwood conservation in California

My friend and colleague Suhit Anantula has brought to my attention an innovative approach to preserving redwood forests, reported in The San Francisco Chronicle. A company incorporated for the venture, the Redwood Forest Foundation Inc, secured full financing from the Bank of America to purchase a logged fir and redwood forest north of San Francisco. It appears that the loan will be repaid through two income streams: sustainable logging, beginning 8 years down the track (to allow for forest regeneration); and the sale of easements to various environmental and conservation groups, presumably for rights of access and other uses as benefits. Differential interest and capital repayment regimes are often applied to this kind of environmental finance, to allow for the lags that ecological systems require. A wonderful example of using business structures to finance beneficial environmental outcomes.

Report from The San Francisco Chronicle link here.

Suhit’s sustainability blog is found here.

Social marketing and domestic greenhouse behaviour

In recent years the potential value of applying professional marketing techniques to producing social and environmental behaviour change has been explored, largely in the US and Canada.  This initiative has given rise to the new discipline of social marketing, which has been defined as “the application of commercial marketing technologies to the analysis, planning, execution and evaluation of programs designed to influence the voluntary or involuntary behaviour of target audiences in order to improve the welfare of individual and society.”

Social marketing campaigns are undertaken through a disciplined sequence of activities.  In this paper I explore the potential application of social marketing to changing the behaviour of Australian households so as to reduce the current contribution of household energy, water and waste use to greenhouse gas emissions.

Download my paper on ‘Social Marketing and the Environment’ here.

Integrated sustainability management

Here’s an article I wrote for Ethical Investor on whole-of-business sustainability management.  The main thrust of the article is to point out that sustainability, as a business issue, has moved from the periphery–compliance and cost–to the centre: it is now a major strategic issue.  Sustainability factors now impact all parts of the business, including finance and accounting, operations and marketing, all integrated in strategy development at the highest levels of the organisation.  In this article I also feature two leading Australian companies, Adelaide Brighton Ltd and Newmont Australia, who have taken on the sustainability challenge in different but equally interesting ways.

Link to the Ethical Investor article here.

Insurance, limited liability and climate change

The insurance sector has been one of the first business sectors to address the business challenge of climate change–obviously because the risks presented by climate change are direct and material to the sector. Here is a fine paper from UCLA and Standford on the issue. It focuses on limited liability risks to insurance providers, but, in doing so, lays out a comprehensive view of the impact of climate change for business generally.

This article explores three major dimensions: sources of legal liability related to climate change, and their links to insurance and law; new liabilities associated with the emerging technological responses to climate-change; and ways in which those in the insurance industry can manage the risks related to climate change for their own companies and for their customers.

Highly recommended.

Paper can be downloaded here.