Chinese CEOs set on a greener path - Smith School of Enterprise

					OCTOBER 18-24, 2013                                                            CHINA DAILY                      EUROPEAN WEEKLY                                                                   PA G E 1 1


Chinese CEOs set on a greener path

            wo reports on how well the                                                                                                                                  vice, but an approach on how to do
            world is doing in rising to                                                                                                                                 end-to-end business.
            the challenge of environ-                                                                                                                                      As Yue Zhang told us, “Sustain-
            mental and socially sustain-                                                                                                                                ability value and business value are
able growth were published recently.                                                                                                                                    completely aligned, and, in fact, they
   The United Nations Intergovern-                                                                                                                                      are the same thing to me. I consider
mental Panel on Climate Change                                                                                                                                          environmental protection, social val-
issued its findings on global tempera-                                                                                                                                   ues and other sustainability values as
ture trends, for the first time in six                                                                                                                                   having exactly the same impact on
years. The other report, published                                                                                                                                      my company as cost saving, brand
every three years, focused on the                                                                                                                                       management, risk reduction and
“corporate temperature”, studying                                                                                                                                       business development initiatives.”
the attitudes of more than 1,000                                                                                                                                           Starting from equipment innova-
CEOs to sustainability. It is the larg-                                                                                                                                 tions focused on energy e ciency
                      est research study                                                                                                                                goals, to systematically approaching
                      of top executives                                                                                                                                 overall building energy manage-
                      ever conducted on                                                                                                                                 ment, to ultimately manufacturing
                      sustainability.                                                                                                                                   sustainable buildings that are also
                         When the UN                                                                                                                                    material e cient, recyclable and
                      and Accenture last                                                                                                                                dust-free, Broad Group demon-
                      surveyed CEOs, in                                                                                                                                 strates how rapid urbanization and
                      2010, CEOs sent                                                                                                                                   investment are driving new solutions
                      a clear message:                                                                                                                                  that can achieve a win-win on busi-
Peter                 Despite the global                                                                                                                                ness value and sustainability impact.
Lacy                  economic slow-                                                                                                                                       From a macro level, most experts I
                      down, business                                                                                                                                    met agree that China urgently needs
                      was well placed                                                                                                                                   to achieve a new balance between
to lead the world toward sustainable                                                                                                                                    economic growth, resource use and
economic growth. They believed that                                                                                                                                     environmental impact. It is a com-
the market would correct for social,                                                                                                                                    mon expectation that the growth of
economic and, importantly, environ-                                                                                                                                     economy and business should not
mental externalities.                                                                                                                                                   only provide the country with jobs
   Three years on and CEOs are less                                                                                                                                     and income at present, but also see
confident. An overwhelming major-                                                                                                                                        more ideas and actions to build the
ity still see sustainability challenges                                                                                                                                 cross-industry capacity for sustain-
as important to their companies’                                                                                                                                        able development in the long run.
futures. However, only a third think                                                                                                                                       For example, China’s latest
business is doing enough to meet the                                                                                                                                    national action plan for air pollution
challenge. On the evidence of 2010                                                                                                                                      prevention has shown great potential
you would expect that proportion to                                                                                                                                     in environment protection-related
have risen.                                                                                                                                                             business sectors, encouraging inves-
   There is good news though, in two                                                                                                                                    tors and entrepreneurs to boost inno-
forms. The first is that CEOs in Asia,                                                                                                                                   vation and implementation in fields
and in China in particular (where                                                                                                                                       such as clean energy, new material,
the views of 42 CEOs of top Chinese                                                                                                                                     bio-tech, emission control and waste
companies were studied in depth),                                                                                                                                       treatment.
see the challenges of sustainability                                                                                                                                       We believe that China is uniquely
as more urgent than do their Euro-                                                                                                                                      positioned to turn challenge into
pean and US counterparts. We call                                                                                                                                       opportunity through the transition
this “the lens of proximity”. Chinese                                                                                                                                   to a new development model, one in
CEOs are closer to the challenges of                                                                                                                                    which the country’s continued eco-
sustainability issues (the trilemma                                                                                                                                     nomic prosperity is decoupled from
of economic growth, sustainable                                                                                                                                         its increasing use of scarce resources
resource use and environmental                                                                                                                                          and increasing environmental deg-
protection, complicated by China’s                                                                                                                                      radation. We call this model the new
new trends of urbanization and more                                                                                                                                     resource economy. It encompasses all
consumer-driven growth). This is                                                                                                                                        levels of society, from the individual
making Chinese CEOs more aware                                                                                                                                          through to enterprises and govern-
of the challenges. Ninety percent of                                                                                                                                    ment, and requires an economy-wide
Chinese CEOs think sustainability                                                                                                      ZHANG CHENGLIANG / CHINA DAILY   transition in how resources are
is a route to competitive advantage,                                                                                                                                    sourced, consumed and managed.
which is nearly 15 percent higher          strategy in the form of transfor-         usually go beyond measuring their            Already bright spots of innova-          Enterprises have a very distinct
than the figure for European CEOs.          mational businesses. Our research         emissions to fully quantifying and        tion are apparent across Asia. From      double identity of both resource con-
   Likewise, although our study            confirms a tangible link between           monitoring the “dollar value” of          investment in clean energy, such         sumer and product/services provider,
shows that CEOs globally are still         high-performance companies and            sustainability to their companies.        as solar power, to innovations in        so there is a huge amount CEOs can
struggling accurately to measure           successful sustainability strategies.     For example, 81 percent of transfor-      mobile technology to connect rural       learn from each other on sustain-
the value of sustainability initia-           The report identifies a series of       mational leaders practice integrated      consumers, the unique challenges         ability, in China and beyond. That
tives to their business, it seems that     features linking what we call trans-      reporting of financial and sustain-        of fast-growing Asian economies are      is why we will be producing more
Chinese CEOs are having greater            formational leaders: companies that       ability metrics.                          generating unique solutions that can     work in the coming months looking
success, with more than two-thirds         outperform their peers on sustain-           If I was to add a third reason for     unlock business value while sup-         at the specific challenges that the
of the ones we studied saying they         ability metrics as well as traditional    optimism it would be this: the number     porting green growth. China’s Broad      new resource economy is present-
could accurately measure the value         business metrics. To take three traits,   of businesses around the world taking     Group, for example, has evolved          ing to CEOs in China and how they
of sustainability to their businesses.     transformational CEOs are more like-      sustainability seriously is rising. The   from being an air conditioning           are tackling it. We know that only
The key will be to push this figure         ly to see sustainability as an oppor-     UN Global Compact, which works to         maker to o ering complementary           by learning from each other can we
toward 100 percent, while the global       tunity for growth and innovation,         convene companies around the world        services as a building energy service    tackle this global challenge locally.
proportion of CEOs saying they can         with more than 80 percent of them         to realize the principles of sustain-     company and manufacturer of sus-
accurately measure sustainability “in      seeing opportunities to out-compete       ability, now has more members than        tainable prefabricated buildings. Its    The author is managing director of
dollars” is falling.                       rivals, reach new markets or develop      ever, more than 10,000 corporate          comprehensive stance on sustain-         Accenture’s Strategy & Sustainability
   The second piece of good news           new business models around more           participants. And many of these new       ability stems from the belief of the     Services, Asia Pacific. The views do
is that we are seeing an emerging          sustainable performance.                  companies are in China, participating     CEO, Yue Zhang, that sustainability      not necessarily reflect those of China
blueprint for successful sustainability       Likewise, these CEOs’ companies        in the compact’s local network.           is not only about a product or ser-      Daily.

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