Business Stripped Bare (39 page)

Good small solutions are like gold dust as it's often possible to scale them up, or replicate them manyfold, so that they acquire global influence. Muhammad Yunus's Grameen Bank is a classic example.

So don't let relative scale put you off your goals.
Think realistically and creatively about what you can achieve
. You can do this whether you're a corporate manager or a sole trader – and what you learn by way of entrepreneurship will directly benefit you in your business.

If there is one line that could sum up all the varied and curious lessons I've learned in business, it's this:
scale doesn't matter – people do
. This thinking is reflected in some of my current work: creating small entrepreneurial 'war rooms' to tackle big issues. So let me show you, finally, how I'm working with Virgin Unite and other partners to set up a war room to help deal with the biggest, most elusive, most pressing and most abstract problem of all: climate change.

Reading comic books, when I was growing up, one of my recurring nightmares was the invasion of aliens from Mars. It was terrifying stuff: everywhere I looked, bug-eyed monsters were zapping humans with their ray guns. The sci-fi films of the 1950s such as
The Day the Earth Stood Still
and
The War of the Worlds
regularly showed our planet under attack. It was a horrifying prospect. The solution was invariably that all the world's nations had to bury their differences and get together to ward off a common enemy.

The equivalent of that alien invasion is already here. It's impossible to see, it's odourless, and it's everywhere. Our war is against carbon. Not an alien menace, after all, but – irony of ironies – one of the building blocks of life.

On the Celsius scale, zero is the freezing point and 100 degrees the boiling point of water. For the last 10,000 years, the average surface temperature of the Earth has been around 14°C. The hottest recorded temperature has been 58°C at El Azizia in the Sahara Desert in 1922. The year 2007 was the warmest on record.

But if the average surface temperature rises by 5°C – and scientists now say it will unless we wean ourselves off this business of burning fuels that release CO2 into the atmosphere – then our planet becomes a hostile and arid place. We are now at 14.5°C – moving to 19°C will be disastrous. So we must act now.

Earlier this year, I was clearing out some possessions of the previous owner on Mosquito Island, which is being developed as a low-carbon ecotourist destination in the Caribbean, and stumbled on some old picture books written by Jacques-Yves Cousteau. Cousteau, who invented the aqualung, warned about the destruction of the sea. In the 1970s, he filmed a polluted section of the Mediterranean devoid of life, and these shocking images led to immediate environmental action.

In his first book,
Window in the Sea
, published in 1973, Cousteau posed the question: What happens if our oceans die?

If the oceans of the Earth should die – that is, if life in the oceans were suddenly, somehow to come to an end – it would be the final as well as the greatest catastrophe in the troublous story of men and the other animals and plants with whom man shares this planet.

With no life in the seas the carbon dioxide content in the atmosphere would set forth on an inexorable climb. When this CO
₂
level passed a certain point the 'greenhouse effect' would come into operation: heat radiating outwards from Earth to space would be trapped beneath the stratosphere, shooting up sea-level temperatures. At both North and South Poles the icecaps would melt and oceans would rise perhaps 100 feet in a small number of years.

The calamity we are facing is not unknown, not unforeseen, not even surprising. Cousteau wrote his prophetic warning thirty-five years ago.

Every business around the world must now radically change its thinking. In every aspect of its operation, it must do much more to reduce the amount of carbon dioxide it releases into the air. And this won't be easy, since the endeavours of humans in agriculture and business, responding to the demands of consumers and customers, have been partly responsible for creating the problem in the first place.

As mentioned, all of our businesses are looking at how they can reinvent the way they operate to try to minimise the impact they have on the environment. This issue has personally captured my imagination and set me off on a journey to discover new approaches.

First, I had to muster the facts. Then I could look at the marketplace, and come up with a scheme. But I also needed an expert sounding board – which I found in both Professor James Lovelock, a man who is the environmental equivalent of Nelson Mandela, and Tim Flannery, an ecologist whose book
The Weather Makers
is the best guide to our current situation that I have read.

Scientists have been able to drill a deep hole into the Antarctic ice caps to collect core samples which they have examined. The ice samples contain air bubbles. From the amount of carbon dioxide in the air trapped inside these icy time capsules, they can tell how temperatures have risen over the years. The invention of the steam engine and the arrival of the Industrial Revolution in the 1780s in Britain began this cycle of the age-old process. But even more influential were the medical and social advances that gifted us clean water, sanitation, a better diet and inoculations against common diseases. Suddenly, there were more of us. The population of the world exploded, and continues to explode, and virtually everyone on the planet is consuming many times more energy than their parents ever did and we are now in 'deficit financing' of the planet – the ecological equivalent of sub-prime lending.

Before 1800 there were about 280 parts per million (ppm) of CO
₂
in the atmosphere. Since then industry has burnt, smelted and forged, and humans have farmed, cooked and heated themselves with huge quantities of carbon. Still, for generations, there was equilibrium as vegetation used atmospheric carbon dioxide to grow. But now we are overdrawn in the carbon bank and heading towards a Northern Rock or Bear Stearns situation very soon.

The economic prosperity of the modern world has been built on two deadly but energy-rich hydrocarbons: coal and oil. Over many millennia, most of Earth's carbon has been locked away in the ground.

Dead plants and animals, buried in the ground and compressed, became fossil fuels. If human activity were to extract all of this carbon from the ground and burn it, the carbon released would combine with oxygen to produce carbon dioxide, and then we wouldn't have to worry about global warming any more: we'd already be dead from asphyxiation. There wouldn't be enough oxygen left for us to breathe.

In July 2005, the Stern Review on climate change was announced by Gordon Brown, then the UK's Chancellor of Exchequer. Sir Nicholas Stern, who was former chief economist at the World Bank, wanted to assess the economic benefits of moving to a low-carbon economy, and the potential for adapting to climate change. The review was published in October 2006 and I found it an impressive addition to the debate. He reported that the atmospheric concentration of greenhouse gases were already up from 280ppm during the Industrial Revolution to 430ppm. This is set to rise to 550ppm by 2035, bringing at least a 77 per cent chance that the average global temperature will increase by more than two degrees. A rise of two degrees is the maximum that scientists believe we can tolerate, before our current climate suffers a runaway collapse.

Most alarming was Stern's warning that with no action on emissions, the world's temperature could go up by more than five degrees by the end of the twenty-first century. This kind of rise would send human life on Earth into unknown territory. He pointed out that even a three- or four-degree rise would cause a serious decline in crop yields, and sea level rises that would threaten London, New York, Shanghai, Hong Kong and Cairo. It would also mean the collapse of the Amazon rainforest and the possible shutting down of the Gulf Stream – the ocean current delivering temperate climates to much of Europe.

Stern calculated that the overall costs and risks of climate change would be the equivalent of losing at least 5 per cent of global GDP. But if a wider range of risks was taken into account, such as the spread of disease, then this could rise to 20 per cent or more. On purely technical grounds, this is a risk to business that now has to be taken seriously – and factored into every part of commercial thinking.

In order to stabilise atmospheric gases at around 500 to 550ppm, global emissions at 2006 levels would have to be reduced by 80 per cent. The challenge is that emissions must peak, then fall by 1 to 3 per cent a year for the foreseeable future. Among Stern's proposals there were four sets of measures that were of particular interest to the Virgin Group: reducing demand for goods and services that produced a great deal of emissions; an increased efficiency in any engines when we did use carbon; swifter action on non-energy emissions, such as the burning and clearing of tropical forest land; and switching to low-carbon technologies for power, heat and transport.

Some global businesses are making an effort to tackle the issue, but piecemeal efforts are not going to be enough. Our war against carbon dioxide needs to be expanded by government and by business into every product, every application and every design. We also need to do something to extract as much existing carbon dioxide as possible from the atmosphere. That was the challenge that drew my immediate attention.

Steve Howard, the CEO of the Climate Change Group, believes we have a few years to make a massive global difference – or human life as we know it could cease to exist within a couple of hundred. I am an optimist and I believe that business can – and will – find the solutions to this massive problem. But for our children's sake, we have to embrace this challenge, every day, from now on.

Perhaps I took nature too much for granted. I was brought up in stunning English countryside, surrounded by wildlife, birds and trees. A love of the natural environment has been a big part of my life. But it was a visit to my London home by a former US presidential candidate that was the tipping point for my view of how that love should inform the way businesses are run.

The former US vice president, Al Gore, came to visit me in Holland Park. I had never met him before. He asked to see me because he was looking for a business leader who was recognised on a global basis. It seemed that I fitted the bill. He thought I could make a gesture that might bring other business leaders along too. He spent two hours giving me, Will Whitehorn and Jean Oelwang a guided tour of the issues surrounding climate change – a presentation that was later to reach many millions as his Oscar-winning documentary,
An Inconvenient Truth
.

Prior to Al Gore's visit, I had read a book called
The Skeptical Environmentalist
, which was dangerously convenient reading for someone in business! It argued that global warming could even be a positive thing that would stop the world heading for the next ice age. But as a result of meeting Al Gore, I went back to other scientists and other thinkers. I rediscovered the work of Crispin Tickell and James Lovelock. And by the end of my reading, I had reached an inconvenient truth of my own: that I had to do something rather than be passive.

Finally I was handed a book that stopped me in my tracks. It was Tim Flannery's
The Weather Makers
. Tim's thesis was fascinating – and alarming. It put flesh on the bones of the concept of global warming. It gave concrete examples of what was happening and why. I devoured its many beautifully written stories. One in particular sticks in my mind: how the American pioneers cut and burnt the great eastern forests and burnt and grazed the western plains and deserts. Eventually, the vegetation grew back – which is why most of America's forests are less than sixty years old and regrowing vigorously in the process, absorbing half a billion tonnes of CO
₂
a year. This has helped cool the planet. Once this vegetation matures, however, it will stop extracting as much CO
₂
, just when we need its assistance most.

Tim's book was a gem, and I noticed that he returned again and again to the work of James Lovelock. Tim was greatly influenced by Lovelock's book
Gaia
, which talked persuasively about the Earth as a single, living entity.

I had to meet James Lovelock and find out what he thought. One of the privileges of my life is that I get to meet many brilliant people. Jim is an independent thinker, inventor and scientist. In his late eighties, he is sharp and lucid. An honorary professor at Oxford University, he has won many medals and accolades for his original environmental thinking.

As a young mathematician and scientist, James Lovelock regularly visited the Jet Propulsion Laboratories in Pasadena. The laboratory was closely connected with NASA and the American space programme, and undertook work for unmanned space missions. Jim's inventions have gone into several of the interplanetary probes NASA has launched over the years to explore other planets. Jim also worked on a remote-controlled microbiological laboratory, which was to be dispatched in a rocket to Mars to test whether the planet could sustain bacteria, fungi and other microorganisms. It was then that Jim began to pose the basic question: What is life – and how can we recognise it?

Working with his acclaimed colleague Dian Hitchcock, he began to study the potential for life on Mars. And as they worked, the scientists naturally turned back, for comparison, to Earth – its biosphere and atmosphere. They came to the conclusion that the only feasible explanation of our planet's atmosphere was that it was being manipulated on a daily basis from the surface. The constant flux of all the different gases in the Earth's atmosphere was itself proof of living activity.