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16 June 2014

When it comes to supply chains, ignorance is risk

Admiral Lord NelsonInteresting report in Bloomberg Businessweek recently on industry's response, or lack of it, to the new US regulations on conflict minerals - the standard response sees to be a shrug and "I dunno..." Or as Charles Harris, an audit partner at PwC, is quoted as saying:

“It took some companies a little bit of time just to figure out what their supply chain was and where they needed to start to gain the information.” [my emphasis]

It seems quite extraordinary that in this day and age that so many major businesses are taking this lackadaisical attitude to the extent where they don't understand their own supply chain. The rules provide for a lack of knowledge, but you would have thought that the risk of this blowing up in their face would spur action not just to avoid a media storm, but also to ensure security of supply.

Businessweek also quotes Keir Gumbs, a partner at Covington & Burling LLP who advises companies on their disclosures, as saying:

“If suppliers are really unhelpful and just fail to respond in any meaningful way or with bad information, companies are just kind of stuck with that.”

Or they could go and find some better suppliers.

 

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12 May 2014

'Do Nothing' never looked so unappetising...

old oil pump

Industries fail. Big brands hit the rocks. Governments fall. Change is as inevitable as the sun rising in the morning.

The winners are those who can read the writing on the wall and embrace the new realities. The losers are those who sit tight and pin their faith in crossed fingers.

With climate change at the top of the agenda, resource prices remaining stubbornly at an historic high and environmental legislation tightening, sustainability pressures are building. On the other hand clean technology evolves, synergies emerge and business opportunities open up.

Change brings with it risk, yes, sure, but what people are less attuned to is the risk of 'do nothing'. A powerful 'Green Jujitsu' lever is to communicate 'business as usual' as the bigger risk - to tap into people's risk aversion to push them towards sustainability, not away from it. That takes a clever piece of reframing, but it does work when you get it right.

 

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10 October 2011

Richard Branson (and me): fossil fuel is fuelling the recession


Sir Richard Branson said something very interesting this week. Speaking at the Slowlife Symposium in the Maldives (above, and no, I wasn't there, unfortunately), he said:

“If we don’t have alternative fuels we are going to have the mother of all recessions.”

This is music to my ears as a. I believe our unsustainability is a major contributing factor to the ongoing global economic slump and b. many, many more people will listen to SRB than me.

In my view, the modern economic system was built on cheap debt and cheap energy - both of which have come to a rather sudden end. The first is much debated in the press, mainly because it was the debt bubble bursting that triggered the current situation. However, despite much arm waving from the prestigious International Energy Agency and others, few people are talking about the second.

The economy has stalled because of lack of demand. Look at the pressures on households - yes many have sadly lost their jobs - but everyone is being hit by rocketing domestic energy prices, road fuel prices, food prices - and we wonder why people are not spending? We need to cut those bills to get the economy going again which will mean improving efficiency and finding alternative energy sources to replace expensive oil.

Flipping into positive thinking mode, we might be able to kill two birds with one stone. By going hard on renewable energy and energy efficiency we can mitigate those rising energy prices and generate new jobs and green business opportunities. As Branson said, it's the "biggest entrepreneurial opportunity of our lifetime."

There has been much debate about whether we can decouple economic growth and carbon emissions, but I'm increasingly convinced we will be forced to do so one way or another. Let's make it the good way.

Photo and Branson quotes courtesy of thisismission.com

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