Addressing National Security through Social Response Capitalism and Business Sustainability

A new report by the National Intelligence Council (NIC) points to climate change as a future US security threat.

On June 25, 2008 Thomas Fingar, the deputy director of national intelligence for analysis and chairman of the National Intelligence Council spoke before the House Permanent Select Committee on Intelligence and House Select Committee on Energy Independence and Global Warming. Fingar noted:

“From a national security perspective, climate change has the potential to affect lives (for example, through food and water shortages, increased health problems including the spread of disease, and increased potential for conflict), property (for example through ground subsidence, flooding, coastal erosion, and extreme weather events), and other security interests. The United States depends on a smooth-functioning international system ensuring the flow of trade and market access to critical raw materials such as oil and gas, and security for its allies and partners. Climate change and climate change policies could affect all of these—domestic stability in a number of key states, the opening of new sea lanes and access to raw materials, and the global economy more broadly—with significant geopolitical consequences. In addition, anticipated impacts to the Homeland—including possible increases in the severity of storms in the Gulf, increased demand for energy resources, disruptions in US and Arctic infrastructure, and increases in immigration from resource-scarce regions of the world—are expected to be costly.”

Sorry to begin this blog with a lengthy quote, however the remarks by Thomas Fingar on the potential security risk implications of global climate change are noteworthy and warrant a moment of pause, reflection and hopefully some further perspective. Fingar further points out… “Government, business, and public efforts to develop mitigation and adaptation strategies to deal with climate change—from policies to reduce greenhouse gasses to plans to reduce exposure to climate change or capitalize on potential impacts—may affect US national security interests even more than the physical impacts of climate change itself.”

First, a Brief Pause and Reflection
Government, corporations, politicians and citizens often accentuate, debate, and glamorize the environmental impacts of global climate change. However few characterize the other critical influences climate change poses to our economic, industrial, agricultural, transportation and infrastructure systems. The concept of sustainability is inclusive of environmental requirements but also the economic, societal needs and governance objectives of corporations, government and society at large as well. A great deal of attention has been paid, from automakers to lobbyists on The Hill to non-government organization groups, to the environmental damages incurred from climate change and modern industry. It is actually a good thing to see the environment “getting its due”, but it is of great importance, some might say of national security, to keep a balanced and holistic view of sustainability, particularly in a post-9/11 world. In the absence of any federal policy direction on sustainability, most governments and corporations are left to their own determination of what the concept means to them, and how they should ultimately address issues like climate change. Some firms view climate change as opportunistic, others as a cost of doing business, still yet others view it as a liability to be negotiated, mitigated or marginalized. Regardless of where you or your firm is on the sustainability continuum (one end being in favor and in high pursuit – the other end being clouded, overwhelmed or unconcerned) there are options for you to consider. First, sustainability in not only about the environment, it’s also about what’s the right thing to do for social needs and economic prosperity. Secondly, sustainability is just as much about environmental protection and conservation as it is about energy security and national security. Third, sustainability is ultimately defined not by governments or corporations but by society at large, thus governments and corporations need to be the eyes and ears, listening to society and transforming the state of our infrastructure, products and services to reflect societal need.

Now, Hopefully Some Insight
The physical impacts of climate change are likely to yield changes in how we produce, distribute store and use energy; produce, distribute and use goods and services; and produce, store, distribute and consume food. Global shifts in the production of food, availability of water and distribution of wealth may result from climate change. Couple this with damages to ecosystem services and the effects of climate change may become even more profound upon human food, information, intelligence, transportation and energy networks. A transformation is underway in the human-built environment and natural environment. In some instances we are patching-or-cleaning up mistakes of the past, in others we are seeking to prevent future mistakes. In the case of climate change the path many see before us, including Thomas Fingar, includes mitigation and adaptation.

There are folks like Mr. Ira Feldman, president and senior counsel of Greentrack Strategies that are thinking 60 months out on mitigation and adaptation strategies. Mr. Feldman recently spoke at the June 19-20th AHC Group Corporate Affiliate Workshop in Saratoga Springs, NY on the topic, “Three Emerging Legal and Strategic Shifts to Sustainability - - Climate Change Adaptation; Ecosystem Services; and Voluntary Standards for CSR”. Speaking from this triage of emerging issues: climate change adaptation, ecosystem services and creation of management systems for CSR such as ISO 26000; Mr. Feldman offered a glimpse of the future to a diverse mix of 80 global corporate leaders on why these topics will be on the global government and corporate agendas within five years.

In addition there are notable firms like Environmental Security International (ESI) who are forward looking enough to be designing systems for governments and corporations focused on operational efficiency, security priorities, and risk management objectives related to the security risks of energy, environment and climate change. ESI works to evaluate and assess environmental security for critical infrastructure within the context of the strategic sustainability missions of their government and corporate clients.

There are also thought leaders like Bruce Piasecki who published his book, “World Inc.: When it Comes to Solutions - Both Local and Global - Businesses Are Now More Powerful Than Government” in 2007 focusing on how a new era of capitalism is reshaping how governments and corporations address adaptation and mitigation strategies through product design, selection and response to climate change. In “World Inc.” Piasecki hones in on the power of business as a transformational agent in creating a better (more secure, less polluting, more enriching) world that addressed social needs through social response product development, that is, building and delivering products that don’t just compete on price and technical quality, but also on their ability to address global challenges like climate change, resource consumption or ecosystem services.

As corporations and governments think through security issues in the context of climate change, or where they are on a sustainability continuum, as well as their own climate change strategies for adaptation or mitigation, there are expert resources for them to utilize like Greentrack Strategies, ESI and the AHC Group. As corporations and governments think about climate change, and perhaps begin to respond through policy, market or product solutions, remember that there are multiple dimensions to this issue and that the hierarchy of beliefs, values and needs is likely to be different for each stakeholder involved domestically as well as internationally. Thus, success will come from listening to multiple perspectives while framing your position and strategy in this ever-changing world.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.

Looking for the Next Economic Boom?: Put Your Greenbacks into Companies that Enhance Ecosystem Services

Ecosystem services sustain all life on planet earth. They are the critical gears, valves, filters, pumps, batteries and buffers that accomplish essential earth functions such as moderating weather, storing carbon, mitigating droughts and floods, cycling nutrients, cleaning the air and water, protecting against erosion, regulating the diffusion of disease, maintaining biodiversity, pollinating plants, decomposing wastes, rejuvenating soil and regulating climate. Ecosystem services have really only begun to be understood by humans including how essential they are to life and to the long-term sustainment and quality of life we’ve established.

Ecosystem services represent the processes the produce and sustain life, many of which we have taken for granted for decades. The “commons” as some ecologic services have been come to know, are becoming less common. The availability of clean water, old growth forests and timber, habitat for fisheries and the pollination of flowers and agriculture commodities are each examples of ecosystem services, each of which is undergoing stress from overproduction, overconsumption and degradation placed upon them from a burgeoning global population of 6.5 billion people.

The Ecological Society of America, US Forest Service, Millennium Ecosystem Assessment, The World Conservation Union, and The Katoomba Group's Ecosystem Marketplace are each useful references for defining ecosystem services as well as organizations that have committed resources to understanding the science, economics and social aspects of how ecosystem services impact the future of capitalism.

For example, The Katoomba Group's Ecosystem Marketplace seeks “to become the world's leading source of information on markets and payment schemes for ecosystem services; services such as water quality, carbon sequestration and biodiversity.” The Ecosystem Marketplace provides “solid and trust-worthy information on prices, regulation, science, and other market-relevant issues, markets for ecosystem services” in hopes that they “will one day become a fundamental part of our economic and environmental system, helping give value to environmental services that have, for too long, been taken for granted.”

The future of capitalism is intimately linked with ecosystem services. It always has been. The key difference between the first 100 years of industrialization and the next Century is the realization that there is just as much value in preserving, protecting and enhancing ecosystem services as there is in extracting the value through consumption and degradation, marked by our behavior with ecosystem services in the last 100 years.

Gary Luck, Associate Professor in Ecology and Environmental Management and Principal Researcher in the Institute for Land, Water and Society at Charles Sturt University has written:

“…I am unaware of any scientist who argues that the ecosystem-service approach should replace traditional strategies for protecting nature. However, it offers great promise as a value-adding tactic to secure conservation gains in regions dominated by humans. It is especially powerful in arguing for the importance of nature conservation in the spheres of society where moral and ethical responsibilities are sidelined – and money talks…The concept of ecosystem services offers a fantastic opportunity to link research and land management agendas across disciplines, as it can incorporate ecological assessment of service-providing organisms, economic and social valuation, and cost – benefit trade-offs of different land management strategies for both the landholder and society.”

US policy makers are now taking a serious look at ecosystem services for future policy and market based mechanisms for conserving natural resources, cleaning and protecting the environment. For example, The Food, Conservation, and Energy Act of 2008 seeks to establish a procedure, protocol and register for measuring, reporting and collecting/maintaining information on environmental (ecosystem) services within the US.

With 100 years of industrialization and environmental damages under our belt its refreshing to see that we’re now taking a more proactive, interdisciplinary and bipartisan approach to environmental economics and valuating the building blocks of life, environmental services. In the next 50 years there will be greater market, shareholder and public attention/emphasis on companies that conserve, protect and enhance ecosystem services – perhaps more than was ever placed on those that purely exploited resources. As we further our understanding about the full extent of “human services” embedded in ecosystems perhaps we will finally give the environment its true market valuation.

Watch firms like ARCADIS, Dow, DuPont, IBM, Geosyntec, Akzo Nobel, Syngenta, BC Hydro and others in years to come as they identify new business opportunities to enhance, conserve and protect ecosystem services. The World Resources Institute March 2008 publication The Corporate Ecosystem Services Review is a useful on-line guide outlining and summarizing the emerging business opportunities to address human induced changes in our ecosystems.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Additional Note: In an unfortunate example of how humans impact the environment, this past week the National Oceanic Atmospheric Administration’s (NOAA) Fisheries Service officially reported that the Caribbean Monk Seal has become extinct, largely due to overhunting by humans; however other influences like climate change, coastal development and entanglement in marine debris played a role in this mammal’s ultimate demise.