Tuesday, April 10, 2007

Where’s the Beef? – How Climate Change will Yield Greater Return on Social-and-Financial Equity

In the early 1980’s we Americans were amused by Clara Peller who asked us one simple question…‘Where’s the Beef?’ on behalf of the Wendy’s fast-food restaurant chain. The one-liner turned out to be a catch phrase in the 1984 Presidential election. In many ways Peller’s phrase continues to entertain us today.

The difference today however is that Peller’s famous line may become more of a literal mainstream reality adding additional irony to our consumptive big energy, big food, big stores, big homes, big everything culture. With agriculture feedstock’s affecting beef prices and the potential for climate change to shift food production in years to come – “Where’s the Beef?” might just turn out to be less funny. And in a satirical sense – we ask “Where’s the Beef?” to the many government leaders that appear to be less of change agents and more status quo - speak within the lines - types of policy makers.

As the world’s population grows, our nation continues to consume more resources and adding more stress and uncertainty on our atmosphere, ecosystem, ocean and land. We already see constraints in the availability of clean, fresh water in regions with growing populations like Asia, Africa and South America. Even the wealthiest countries of the world are not without water challenges including the
U.S. Southwest who has some of the fastest growing cities in the country. With water constraints already affecting states like Arizona, Colorado and New Mexico some believe the U.S. Southwest could transform into dustbowl like conditions that plagued the Midwestern U.S. during the 1930s.

A report released by the
Intergovernmental Panel on Climate Change on April 6, 2007 summarized a slew of dramatic impacts, caused by human induced climate change set to transform entire regions of the world. The IPCC report estimated that the earth’s warming temperatures could result in food shortages for 130 million people by 2050 and threaten to cause drought, higher seas and more severe weather in Australia and New Zealand by 2030.

The IPCC report noted that “drops in (food production) yields combined with rising populations could put close to 50 million extra people at risk of hunger by 2020, an additional 132 million by 2050 and 266 million by 2080”
Associated Press. The report summarized how rainfall may decline by as much as 5 to 12 percent in China, greatly reducing food production yields for the billions that reside there. In addition the severity of weather in Australia, New Zealand and other countries is likely to increase as a result of climate change.

Questions of how climate change may impact social equity issues are emerging in our daily lives. Do we feed cattle or humans? Do we feed our cars or cattle? Do we invest in game-changing energy technology or pump more emissions into the air? Do we explore the development and use of genetically modified and bioengineered crops to meet growing demand for food and agriculture commodities? Do we wait for help, or reach out our hand and get involved? The debate on climate change is less of a debate nowadays. Instead the debate has shifted from whether or not it is occurring, to what to do about it.

Even so, we are only at the infancy of climate change and the debate about how the new social equity culture that has emerged can transform our ideologies as they pertain to consumption, production and economics. As human life and the state of our life-sustaining systems await our reaction – new one-liners will emerge:

Where’s the relief? (Here we think of the aftermath of Hurricane Katrina)

Where’s the light? (Here we think of our slow transformation to adopt technologies that can minimize electric grid disruption and enhance reliability)

Where’s the clean water? (Here we think about the nature of how we use water for production of goods/services disproportionately to longer term human health and environmental needs)

Where’s the food? (Here we think of the millions of hungry that are born into poverty and substandard living conditions – whose immediate environment constrains their ability to sustain life in a healthy way)

Where’s the leadership? (In
World Inc. a new book by Dr. Bruce Piasecki he talks about “Developing Leaders One Can Trust” in this new era of social response capitalism – where product leadership is as important as the kind of leadership that runs larger multinational firms)

Where’s the dialog? (Is there enough or too much dialog on climate change and what the best options are for addressing it? We believe, in this instance, more is better. The
AHC Group has been leading discussions on social response through its leader-to-leader benchmarking workshops covering governance & innovation, shareholder value, risk reduction & remediation, and emerging issues for the past 25 years.

So, as we think about our next pop-culture comedic rant like “Where’s the Beef?” let us consider some of these less humorous rants that we will be unable to drown out from our lives in years to come. While big food, big cars, big homes and big egos have sheltered and protected us from the world’s woes, we are now realizing that have to begin addressing social need through the power of business, government, philanthropy and individual care like no other time in history.

We believe this social history is leading us to become the “S-Generation” and we now must take on the responsibility and potential good fortune that comes with it. The “S-Generation” is being born today – at the dawn of our reflection and recognition that we cannot continue our rate of consumption and growth without changes in the way we think about, consume and use energy, food, water, land and air. The “S-Generation” is being born at a time when the law of the commons has become less common – a time when clean water and air is not as prevalent as they were 100 years ago. So – with diminish ecologic and social returns the “S-Generation” will likely emerge to transform our current state of assumptions as they reevaluate the role of business, government, politics and society in creating a better world.

As climate change affects the wealthiest nations of the world – our challenge will be to think not only of ourselves – but all people – as we seek new solutions to health, happiness and ecological freedom. Corporations have decided to move out of rank and file positions on climate change and begin evaluating their lot in a world on the cusp of climate fluctuation. Like the stock values that they grow – they are seeking to gain value in a world of uncertainty while providing value back to society. We see this as firms seek greater return on social equity as much as they do on their capital, investments and private equity.

Watch firms like Bank of America, HSBC, Suncor Energy, HP, The Gap, and Wal-Mart in months and years to come. We believe the thought leaders in these firms will lead new paths of growth in business while addressing issues pertaining to social equity and climate change – raising their social and financial equity with stakeholders and shareholders alike. They are clearly thinking about the “S-Generation” and may likely be around to help that generation tackle the challenges of climate change and other societal needs well into the future.

Mark C. Coleman
Senior Associate, AHC Group, Inc.

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