Living on a farm, I have come in to direct contact with the consequences – good and bad, of the interaction between humans and the environment. Growing up on a property in Central New South Wales has fostered this passion for the environment.  Over the years a holistic (sustainable) approach on the farm and at home has proven beneficial for my family.

 Interning for OgilvyEarth was therefore an obvious choice for me and my first and only preference.  I’ve always been impressed and interested by Ogilvy and my passion lies with sustainability.  The opportunity to work with an organization that supports many of the values I’ve grown up with is inspiring. 

The projects that my boss Andrew has set up for me to accomplish over the month illustrate the growing interest and need for quality PR in order to effectively communicate an organization’s sustainability goals. 

If meeting the other interns this morning didn’t calm my nerves, meeting the Ogilvy team certainly has.  The office has a great vibe. I’m looking forward to the month ahead!

(This blog first appeared in RenewEconomy on 26 September 2012). “Greed”, said Gordon Gekko, the villainous investment banker played by Michael Douglas in the 1987 film Wall Street, “is good”. He went on: “it clarifies, cuts through and captures the essence of the evolutionary spirit.”

Former Prime Minister Paul Keating put it another way: “In a two horse race, always back the one called self-interest”.

Those of us who work with companies to engage in the sustainability space often appeal to what might be termed enlightened self-interest. We talk about the benefits of the action: to reputation, to brand, to sales. Sometimes, these arguments are defensive: if you don’t act sustainably, you will lose your social licence to operate (or maybe even your legal licence). Sometimes, they are more positively framed: act sustainably, and you will benefit from an enhanced reputation, and an ability to charge motivated consumers more for your product or service.

But it has always been an uphill struggle, because the benefits are often indirect or intangible. It is hard to draw a direct link between operating in a more sustainable way, and financial reward. A company’s primary responsibility is to its shareholders. This is not just a general concept: it is a legal requirement. And until firms believe that aggressive action to reduce their environmental footprint is in their shareholders’ interest, there is a limit to the amount of resources they can devote to it. To put it another way: until there is a line of sight to a return on investment, efforts to minimise environmental impact will not, for the majority of companies, be a core focus.

The good news is that this line of sight is coming. There is an increasing body of evidence to suggest that, at least in specific industries and specific areas of sustainability, there is an increasingly a direct link between investment in sustainability and shareholder value.

Last week, the Carbon Disclosure Project (CDP) – a partner of OgilvyEarth – released its annual ‘Global 500’ climate change report, an analysis of climate change disclosures made through CDP by the 500 largest listed companies in world, on behalf of 655 investors with assets of USD$78 trillion. That such a large number of institutional investors want to know this information is encouraging enough, but one particular finding – almost buried in the report – was particularly telling. This is that the 33 companies identified by CDP as ‘carbon performance leaders’ among the Global 500 outperform the others.

And not by a little bit. The companies that make up the ‘Carbon Performance Leadership Index’ delivered more than double the average returns of than companies outside the leadership subset. For the financially-minded among you, ‘return’ includes interest, capital gains, dividends and distributions (full details in the report).

For companies, this is the line of sight to a return on investment. This is self-interest writ large, naked and uncompromising. Hallelujah!

Of course, equity market performance is influenced by a broad range of factors, of which carbon management is but one. It is one thing to find a correlation, and another to find causality. I am not suggesting that improved carbon management will cause a company’s share price to go up (and you should certainly not run off and make investment decisions based on this column…). But the findings do show that good carbon management has, for most of the past two years, been associated with significantly above-average market performance.

Part of this may be because investors are increasingly pricing in the financial risk to a company from climate change (or at least from energy prices) and are seeking to reallocate assets to minimise exposure to these risks. Part of this may be because companies that manage carbon risks well, also happen to manage other risks well. And part of this may be because good carbon management strategies may be a proxy for good management overall.

This merits further analysis. But for now, those of us who want to see companies reduce emissions and drive sustainable business practices should revel in this finding. Nothing focuses a company’s mind like its return to investors. And it is increasingly looking like companies that do a good job of disclosing and reducing their emissions, return more money to investors.

The CDP study is not alone. In June this year, Deutsche Bank conducted a meta-study: a global assessment of over one hundred studies that sought to ascertain whether companies with high ratings for Environmental, Social and Governance (ESG) factors performed better than their peers. The results were striking: 89% of studies showed that companies with strong ESG credentials exhibited market-based outperformance. Further, every single one of the more than 100 studies indicated that companies with high ratings for ESG have a lower cost of capital. In the words of Deutsche Bank, “the market recognizes that these companies have a lower risk than other companies and rewards them accordingly.”

It is not surprising that investors are more and more interested in the sustainability performance of companies. The Investor Group on Climate Change Australia/New Zealand represents institutional investors with total funds under management of approximately $900 billion, with the aim of encouraging government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of investors, such as super funds. It is from investors like these that the real impetus for companies to reduce their environmental impact will come from.

“Greed” said Gekko, “in all its forms, greed for money, for love, for knowledge, has marked the upward surge of mankind”.

Call it greed, call it enlightened self-interest – the fact is that it appears that companies that put more into reducing their environmental impact, make more money. That is the ultimate motivator. It is a finding even Gordon Gekko can agree with.

Andrew Ure is Managing Director of OgilvyEarth, the sustainability practice of Ogilvy Public Relations. www.ogilvyearth.com.au 
This blog first appeared in RenewEconomy: (http://reneweconomy.com.au/2012/sustainability-and-greed-unlikely-bedfellows-61641)

It’s been a good week for carbon pricing. On Monday, a Nielsen poll suggested 54 per cent of Australians haven’t felt a negative impact since it was introduced. And yesterday afternoon came news that the government would link the Australian emissions trading scheme to the European Union scheme, which has been in operation since 2005.

This was not a surprise – the Climate Change Minister, Greg Combet, foreshadowed the link at the COP17 Climate Conference in Durban in December. However, this announcement has the potential to further swing public opinion around to the idea that carbon pricing is not so bad after all.

Most of the media response has focused on the removal of the floor price. When the carbon ”tax” ends and the emissions trading scheme kicks in on 1 July 2015, the 200 or so Australian companies with a liability under carbon pricing have two options: reduce emissions themselves, or buy from others.

The floor price was designed to guarantee a minimum payment to these sellers. Now that it is gone, reducing emissions will be cheaper, at least in the short term, for Australian companies. They will be able to source credits from Europe, which yesterday were trading at $9.80 per tonne. They should be happy. So too should other Australians, because the cost to the economy of meeting Australia’s emissions target just came down.
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However, the longer-term public relations boost to the government comes from the link with the EU. The climate debate in Australia has been bedevilled since the Copenhagen climate conference in 2009 by the claim Australia is too far ahead of other countries in dealing with the issue – that we are doing more than our fair share.

Other countries do price carbon. For example, parts of China are trialling emissions trading, as are parts of the US, and India has a carbon tax on coal. In fact, 30 per cent of the global economy will be covered by emissions trading by 2013. This has been lost in the debate, not least because Australia’s floor price made it one of the more expensive schemes around. However, now that it will effectively be synchronised with emissions trading in 30 countries, it will not be possible to mount the argument that we are going it alone. From a public relations perspective, this may be the single biggest benefit of the announcement.

Other aspects of the announcement are interesting from a PR perspective too. Why did the government choose to drop this good news now? Would it not have made sense to negate some of the more furious criticism about the cost of the scheme a few weeks ago? The timing of the announcement may have been planned, or it may simply have been that the negotiations with the EU did not reach a conclusion until now. Whether it was deliberate or not, the timing could not have been better.

The carbon price is in place, as is the sky. Australians are beginning to question whether the policy will actually cost them that much at all. Power bills for the first period to include carbon pricing have mostly not yet arrived. The government is making the most of this window – while critics of the scheme are feeling under pressure – to deliver another punch: it’s going to be cheaper than you thought, and we are falling into line with the rest of the world (or at least 30 other countries).

Added to this, governments tend to avoid reneging on agreements they have reached with other countries, regardless of who was in power at the time of the agreement. Some might argue it was reckless to commit the country to an approach predicated on a policy that the Opposition Leader has made clear he would like to repeal. There are no legal impediments to walking away from this deal with the Europeans if the scheme is repealed – but it’s not a good look.

There are negative aspects to the move. It’s bad news for some hardened climate activists, who support climate action but not emissions trading. It’s also potentially bad news for those who support preserving tropical forests as a means of storing carbon, as the EU does not accept these credits into its scheme.

But there can be little doubt this announcement has been a PR win for the government. In June, the Climate Institute, a think tank, released polling showing only 44 per cent of Australians believed the Coalition would repeal carbon pricing if they won power. This number must now surely drop further. Carbon pricing just got more difficult to dislodge.

Author: Andrew Ure, MD OgilvyEarth

This article first appeared in the Sydney Morning Herald on 29 August 2012.

By Andrew Ure, MD OgilvyEarth

This article first appeared in Renew Economy on 22 August 2012

Following the frenzy of commentary around the introduction of carbon pricing into the Australian economy on July 1, there has been a striking drop-off in coverage of the issue. With the sky firmly in place, and legs of lamb still in the weekly shopping basket, there has been relatively little to fan the flames of media interest.

One ember does remain: over the next three months, electricity bills will be arriving in households all over Australia. In NSW and Queensland, state governments have legislated to require bills to include a statement explicitly blaming the ‘federal carbon tax and green energy schemes’ for large cost hikes (a little naughtily, an annualised figure is used on the quarterly bills, and state-based policies are included). In any event, rising household energy costs appear to be shaping up as an attractive battleground for carbon critics over the next few months.

However, showing a media adeptness that has not always been evident over the past few years, the government has introduced a new dimension to the debate. With her landmark speech to the Energy Policy Institute on August 7, the Prime Minister went on the front foot.

She did not seek to downplay electricity price rises – she did the opposite, placing them centre stage, but laying the blame elsewhere, at the feet of Liberal state governments that have been “increasing their revenue at the expense of the family electricity bill”. Gillard said: “That has to stop”.

In reframing the debate to focus on the approximately 50 per cent of household power bills that goes on “poles and wires”, Gillard has reshaped this battleground. (Of course, it helps that all but two state governments are currently run by the Libs, even though ‘gold-plating’ is hardly a new phenomenon).

Regardless, a debate on rising energy costs, while not without drawbacks, plays into a key part of the Government’s mitigation agenda: the importance of energy efficiency. Could this long overlooked pillar of climate change policy finally have its turn in the sun?

There are reasons to believe it will. From an operational perspective one of these is obvious: the era of cheap energy is over, and energy efficiency can save households hundreds of dollars, and businesses anything up to millions of dollars, per year. However, energy efficiency also has a psychological advantage: unlike carbon pricing, you don’t need to believe in climate change to believe in energy efficiency. This means that there are no ideological obstacles to its uptake.

Some of the most vociferous opponents of action on climate change are making efforts to reduce their household’s energy use – in fact some describe this explicitly this as their ‘protection against the carbon price’. Companies that vocally opposed the introduction of carbon pricing have energy efficiency programs in place that saving tens of millions of dollars (and, as it happens, millions of tonnes of greenhouse gas emissions).

Households and companies all over Australia can be encouraged to get on board with energy efficiency. Just don’t mention the C word. (In her speech, Gillard mentioned climate change just once, but I think she got away with it).

In fact, in practical terms, it may be best not to mention ‘energy efficiency’ either. The term is so broad as to have little meaning for the average Australian. Instead, proponents would do well to focus on articulating the benefits of specific activities – such as buying efficient equipment, or turning the TV off at the wall.

And this should be easier and easier as the media focuses on rising energy bills. In this context, initiatives such as the Telegraph’s One Big Switch campaign serve to help people understand that an energy bill is not something that happens to you: it is something you can influence. The more the media talk up the costs of energy, the more opportunities there are to educate Australians on how to use less of it.

The media cycle is about to provide energy efficiency with a chance to shine. The broad concept has bipartisan support. Efficiency measures can help households and businesses protect themselves against rising energy prices (including carbon price impacts). Those who are driven by the environmental benefits of energy efficiency should be delighted. They should be in love with One Big Switch. But for the moment, it’s probably best they stay in the closet. Energy efficiency is the climate fix that dare not speak its name.

Walking through my local supermarket last week, the dizzying aisles piled high with multi-coloured Easter bunnies and foil-wrapped chocolate eggs made it hard to imagine that I had just spent three days speaking with leading experts about potential food shortages and the inadequacies of our global food system.

The Second National Sustainable Food Summit in Sydney Australia brought to light the many unspoken pressures on our current food system that threaten to leave Australia, along with most other countries around the world, unable to feed their growing populations.

As I stared wide-eyed down the supermarket aisle, the conference speakers’ messages seemed terribly disconnected from the abundance overflowing in front of me.  Endless varieties of chocolate eggs had been tailored to delight even the most finicky of tastebuds.  Nowadays, consumers can have their chocolate treats in multiple shades: dark, milk, white or some combination of all three.  They can have them candy-coated, caramel –centred, miniaturised, orange-flavoured, hot, frozen, sugar-free, individually-wrapped or even family-packed.  This is not limited to just Easter goodies.  The average developed nation supermarket is brimming with an abundant variety of inexpensive food year-round.  So, it’s no wonder that most of us are not preoccupied with projected food shortages, dwindling seafood supplies or shrinking croplands on the agenda of the National Sustainable Food Summit.

The reality is, of course, that what see from our perch at our trolley’s handlebars is not the full picture.  Taking a long-term macro view reveals a world where exponential population growth will drive up demand for food production and a rising global middle class will increase the number of people able to afford animal protein (which we know takes more water and energy resources to produce than vegetables).  Additional pressure will also come from rapid urbanisation and the growing number of megacities (those with populations exceeding ten million) which will not only encroach upon fertile agricultural lands and add to the complexities of getting enough fresh food into cities fast enough to satiate our tummies, but also exacerbate the dramatic disconnect between our farmers and our plates.

When we see the big picture, we discover additional pressures on our food system that are telling us our current system needs a re-think.  Diminishing diversity in our basic crop species is putting our resilience at risk.  Predictability of crop production is being threatened, as increasingly irregular weather patterns throw off century-old agricultural practices (regardless of which side of the climate change debate you find yourself).  International trade is encouraging us to relinquish control of our food sources, as we increase our dependence on overseas ingredients and processing.  And the experts we rely on to produce our food are abandoning their vocations, as financial pressures from rising energy costs, industrialised food production and shrinking profit margins chase farmers from their fields to city jobs.  With something as vital as food, how is that we have found ourselves putting all of our eggs in one basket (no pun intended)?

Yet, in the face of this bleak reality, the conference was optimistic and solutions-focussed.  True, we cannot rely on old systems if we are to produce more food with fewer resources in the face of changing environmental conditions.  However, by working together across community, industry and politics, we can create viable solutions.  This was the resounding message that threaded throughout the three days of conference talks and workshops.

Experts pointed to specific technologies, policies, communities and case studies that might hold the answer.  Discussions pointed to concepts such as decentralised food production, urban farming, renewable energy, alternative food sources, cross-industry collaboration, consumer-driven system changes, meaningful partnership between NGOs and food suppliers, supply chain traceability, affordability and equity in food access, national food policies, nutritional requirements and cultural considerations of the role of food in society.

Already we can see evidence of big brands, government and community groups starting to work on solutions.  In Australia, one state government campaign is trying to teach people how to avoid letting perfectly good food go to waste with the Love Food Hate Waste initiative. Major Australian supermarkets Woolworths and Coles have each made sustainable seafood commitments and major seafood suppliers like John West are taking important steps to ensuring the sustainability of their supply.  Unilever is also taking serious steps to improve the sustainability of the food it sources, with its Lipton brand sourcing Rainforest Alliance certified tea and its commitment to move its Ben & Jerry’s brand to fair trade certified ingredients, for example.  Coca-Cola too is working with local communities and environmental groups to improve the sustainability of its ingredients, through Project Catalyst, which aims to make sugar cane in Australia agriculture more sustainable. Full disclosure here: several of my insights here come from the work that OgilvyEarth has done with Woolworths, Lipton, John West and Project Catalyst).

In each of these cases, the need for proactive collaboration between industries and sectors is critical to making progress.  With my sustainability communication hat on, I see the important role communication will play in enabling the kind of future thinking and real action we will need to change the course of our food system.  Already through my work with clients, I have seen how facilitated conversations and strategic communication can enable the kind of idea sharing, inspired collaboration, trust building and dialogue needed to improve on the status quo.   No, I don’t know exactly what our food secure future will look like.  But I do believe that it will require a combination of technical and policy solutions as well as a new system of values, cultural norms and perceptions to change how we think about the food we eat.