M Institute

Does green beer work?

The amber liquid is turning green - just check out Stella and Adnams. But does green beer make sense? M Institute co-founder Jyoti Banerjee investigates the inside story and discovers how one medium enterprise company is reaping business benefits from green beer. 

Less glass. Less CO2 emissions. 

The latest advertisement hoarding from Stella Artois features the beer company’s new lightweight bottle. As the Stella ad claims, “every one of our 250 million lightweight bottles contains less glass to help reduce CO2 emissions.”   

I think it’s great when household names like Stella believe in sustainability to such an extent that they can focus an entire ad campaign on just this one message of lightweight bottles. Customers today like to know that their supplier has done what is possible to reduce the environmental impacts related to their purchases. 

So well done, Stella, for taking the trouble to lower the weight of your highest selling bottle by 7%. Apart from the citizenship aspect, this sort of environmental initiative makes great business sense too. A lighter bottle is cheaper to transport and needs less energy to make. 

When I saw the Stella ad, I was reminded of another beer company that had made some serious inroads into improving its environmental performance: Adnams. Now Adnams is a much smaller business than Stella – in fact, it’s clearly in the medium enterprise camp with revenues around £50m annually. Adnams was the first to bring out carbon-neutral beer, an altogether deeper initiative than making lighter glass bottles. Every aspect of the company’s processes had to be re-assessed to make East Green, the world’s first carbon-neutral beer. 

Here’s what I learned about the business end of sustainable beer production, listening to Andy Wood, managing director of Adnams, talk about East Green: 

Copenhagen summit on climate change sees greater US engagement

A first-hand account on last week's Climate Change Summit in Copenhagen, from M Institute co-founder Paul Druckman, who is also chair of the Accounting for Sustainability Group led by the Prince of Wales.

My main recollections from the 2009 World Business Summit on Climate Change coalesce around a few key themes: engagement from the great and good; the Copenhagen Call; an immersion in USA-centric Americans;  a lost opportunity to engage with the delegates; but a great initiative that should be applauded and advocated.

The summit opened with Al Gore delivering a performance that we have come to expect, but he did hit the spot, in my view. His perspective is that business can only operate on the rules constructed by the world’s politicians, who need to reward good corporate behaviour by accounting for externalities.  A great quote from his session: “Mother Nature does not do bail outs.”

Throughout the summit the focus was on China and the USA because they have such dominant markets but also because they are the new dimension to these talks compared to Kyoto, with both governments becoming major forces for change.

The aviation session left me cold, I am afraid, mostly because of their goal to have “carbon neutral growth” – notice the word growth in that statement. They just have not got it.

For me, the key speech in the politicians' session was from the Chinese Minister who gave a stern warning to the developed world to maintain the “principle of common but differentiated responsibilities.” His main position was that current negotiations have still not reached substantial progress, because of some countries trying to change this fundamental principle and others setting new processes in train, which the Chinese are very concerned about. EU President Barosso responded later in the conference by saying that climate negotiations for COP15 are tough, but the USA is a really positive contributor this time around.

The Canadian Environmental Minister did make points not raised elsewhere about green protectionism, especially in the USA, but then blotted his copybook in my view with the unequivocal statement that “the challenge before us is all about technology." Harish Hande, of SELCLO-India, a social entrepreneur, really challenged the mindset later in the conference, with his repeated plea to the world business leaders for business to be more focussed on consumer, rather than wants. He created a dimension in the behavioural change aspects that I did not hear at all from others, much less expect in a dinner conversation around the table.

The Business action session was entertained by the contribution from Shai Agassi, once the darling of German software giant SAP and now at the sharp end of technology change with his fledgling electric car company. A great quote from Shai: "the one thing we can’t say to God is that we got the carbon pricing wrong." Shai, though, did bring some more reality to the proceedings by referring to behavioural change in stating that “this is not Google or the iPod which creates a new market. This is changing the economies and the businesses – get the incentives right.”

David Blood from Al Gore’s Generation investment vehicle couldn't understand why investors in the major capital markets continue to invest in high-carbon companies - instead, he points to low carbon businesses as the future.

I was looking forward to the communications session and was poised with my laptop keyboard to gather some words of wisdom. Let me say I was somewhat underwhelmed, only absorbing that new media is important and that perhaps people do not respond to fear but to disgust.

The closing session brought attention to the need to be quick, and on a global scale. Of the developed world, Australia has seen the effects of climate change at first hand and has it as a current imperative. For other developed countries, it is a message of potential problems rather than having to deal to current disaster - getting the right kind of attention is a challenge, as a result. The Copenhagen Call was the finale, important but unfortunately not done with style or any expertise.

Dealing with carbon regulations

While the Obama administration is moving fast to break with eight years of "climate denial" under George Bush, the UK government seems to have lost its early focus on introducing climate change regulations. Jyoti Banerjee investigates.

For a time, a year or so ago, it looked as if UK companies would be required to meet mandatory regulations on carbon emissions. But the focus seems to have been lost, under pressure from business lobby groups that are concerned about the impact such regulations will have on British companies. Instead, UK companies are urged to report their carbon emissions following recommended guidelines, and the soonest we will have a carbon regulatory framework will now be 2010, when only Britain's largest companies will have to meet the forthcoming Carbon Reduction Commitment (CRC) mandatory framework.

The Americans are still debating the merits of carbon trading schemes versus carbon taxes, with carbon trading, based on existing EU schemes, gaining ground among policy-makers. Right now, no one really knows what the Obama administration will seek to put in place but it is quite certain that whatever happens in the US will be felt over here in the UK.

While the Obama administration is moving fast to break with eight years of "climate denial" under George Bush, the UK government seems to have lost its early focus on introducing climate change regulations. Jyoti Banerjee investigates.

For a time, a year or so ago, it looked as if UK companies would be required to meet mandatory regulations on carbon emissions. But the focus seems to have been lost, under pressure from business lobby groups that are concerned about the impact such regulations will have on British companies. Instead, UK companies are urged to report their carbon emissions following recommended guidelines, and the soonest we will have a carbon regulatory framework will now be 2010, when only Britain's largest companies will have to meet the forthcoming Carbon Reduction Commitment (CRC) mandatory framework.

The Americans are still debating the merits of carbon trading schemes versus carbon taxes, with carbon trading, based on existing EU schemes, gaining ground among policy-makers. Right now, no one really knows what the Obama administration will seek to put in place but it is quite certain that whatever happens in the US will be felt over here in the UK.

CSR needs new focus on medium enterprise

M Institute co-founder Paul Druckman is attending the European Multi-stakeholder Forum on CSR (corporate social responsibility) in Brussels from where he sends this note outlining a couple of things that CSR groups could do to help medium enterprises engage with the concept. 

I send this note while attending the European Multi-stakeholder Forum on CSR in Brussels on 10th February 2009. The Forum brings together about 250 people from key stakeholder groups, including employers and business representatives, trade unions, investors, academics, civil society organisations and public authorities. The aims of this meeting are to review progress on CSR in Europe and globally, and to discuss possibilities for future joint initiatives.

From the perspective of the medium enterprise, there was an unexpected focus on medium enterprise during the morning session. Some of the issues raised and proposed included: 

• CSR uses the term “corporate” and this can be a problem in medium enterprise where that term implies large corporates
• The link between CSR and public procurement is essential when thinking about medium enterprises
• SMEs need tools and instruments to implement CSR, this cannot be simply downgraded large corporate tools. 

UEAPME, the European employers' organisation focusing on SMEs, has a CSR focus which seems to be on diversity. Check out  http://www.csr-for-smes.eu. 

The multi--stakeholder forum concept, such as this one, is fascinating as each stakeholder brings such different perspectives, but with the tendency being to focus on society, rather than business issues. This may be unfair, but it is certainly my impression so far today.

Medium enterprise and the low-carbon economy

Climate change, whether you believe in it or not, is going to change every business on the planet, either by force of regulation, or by a competitive drive towards low-carbon business models. Medium enterprises have a great opportunity to be the next generation of big winners in a future low-carbon economy. Or big losers. M Institute co-founder Jyoti Banerjee investigates the balance of probability.

Last week BBC Radio 4 featured an interview with a Canadian academic who has developed a prosthetic knee that generates electricity every time the knee flexes. It’s a great idea for helping provide power to disabled people but it turns out that there are other applications as well. The military could generate electricity for their communications devices while walking. And the rest of us could walk around to power up our iPods, mobiles and GPS units.

Walking to generate electricity is not going to turn back the tide on climate change but it is just one more example of the way clean-technology approaches are gaining traction in the market.

Medium enterprises are probably as concerned as everybody else about climate change but many executives of such organisations that I have met wonder what they can do to really make a difference. After all, the industries that have to make the biggest changes to their carbon productivity, such as energy, transport and heavy industry, are usually not populated with medium enterprises. Executives in medium enterprises agonise over installing efficient heating, or motion sensors to switch lighting in less-used locations like toilets because they know that these things make good business sense anyway, but surely none of these are going to tackle the problem of climate change.

Green issues climb medium corporate agenda

As large enterprises jump on the sustainability bandwagon, is it time for medium companies to engage on green issues? M Institute correspondent Joe Lickens looks at some corporate announcements to see how much is for real, and how much is flim-flam.

For those who were unsure of the need for decisive action against climate change, last year’s Stern Review was pivotal. At last, the potential ramifications of climate change were spelled out in business terms – as “the greatest and widest-ranging market failure ever seen”. Public pressure on businesses mounted accordingly. But, while some companies are adopting green strategies that are genuinely impressive, others are still dragging their heels.

Since the issue of climate change was finally admitted to the corporate agenda, the pace with which it has risen up the priority list is remarkable. In the most recent Ipsos Mori poll, eighty percent of respondents said that a company’s environmental reputation would affect their purchasing decisions. As M Institute co-founder and chairman, Paul Druckman points out, “You can take competitive advantage by showing that you are becoming a greener company.” Druckman is involved in a number of initatives exploring how organisations will account for sustainability issues.