Why it is easier and cheaper to change this world than to shift to another
By Dimitri De Vreeze, Member of the Managing Board, Royal DSM
Dimitri De Vreeze joined DSM in 1990 in Finance in DSM Fine Chemicals. Within DSM, Dimitri is responsible for DSM’s Materials cluster, consisting of DSM Engineering Plastics, DSM Dyneema and DSM Resins & Functional Materials. He also oversees DSM’s business in the Netherlands and Asia, and is responsible for Group Sourcing.
Stranded assets is a global phenomenon that refers to assets becoming obsolete or devalued. The term has pervaded environmental discourses: specifically on the use of carbon-intensive fossil fuels, which will eventually be stranded and the concept of ‘stranded assets’ is quickly gaining attention from global industry businesses. With this new concept being introduced, concerns continue to loom over the impacts of climate change on our world. These concerns have translated to seek alternative measures. With new alternatives being presented, it is often easy to overlook measures to tackle the core issues.
In late February this year, NASA scientists announced the first known system of seven Earth-size planets around a single star. It was a remarkable achievement of science, a proposition that could have easily been dismissed as farcical ambition or a mere speculation.
NASA officials and independent scientists were understandably excited, describing the discovery as a significant piece in the puzzle of finding habitable environments conducive to life and the best target yet for studying the atmospheres of potentially habitable, Earth-size worlds.
This stunning discovery has certainly presented a new hope for our future, yet the reality of it prompts serious considerations around the challenges of moving to an alternative habitation such as costs and with current technologies: nearly impossible.
Located about 235 trillion miles from Earth, this newly discovered system of planets is in scientific terms, relatively close to us.But the tyranny of distance is clear. If we could travel at the speed of light it would still take 40 years to reach the new planets, or with today’s rocket technology 11,250 years.
The discoveries carry great value for this domain of scientific research. At the same time we as human species are confronted once more with the humble conclusion that, given the vast challenges to migrate to another planet in the near future, we ought to remember that we all have one planet to host us and therefore to take care of.
Climate change: An existential threat
In 2017, the Global Risks Report of the World Economic Forum ranked climate change as one of the top three trends to shape global developments over the next 10 years and one of the truly existential risks to our world. Unlike the threat of nuclear weapons or pandemic disease, however climate change ranks among the highest in terms of likelihood as well as impact.
It was the realization of this threat that saw an unprecedented global consensus in 2015 when all of the world’s nations – nearly 200 countries – converged in Paris to address the implications of climate change.
Things have moved forward rapidly since the political consensus in Paris. To assist investors, and establish a new framework of transparency, a Task Force on Climate-related Financial Disclosures comprising some of the world’s most powerful bankers, regulators and executives released a set of preliminary recommendations in December 2016 for how companies should measure and disclose the financial impacts on their companies of climate change.
On January 10, 530 companies including Royal DSM and 100 investors from Fortune 500 companies to small businesses called on the Trump administration and the new United States Congress to support policies to accelerate a low-carbon future that will help curb climate change. Collectively these companies take in nearly $1.15 trillion in annual revenue are headquartered across 44 states and employ about 1.8 million people.
Just six days later, on the eve of the Annual Meeting of the 2017 World Economic Forum (WEF) in Davos, the Business and Sustainable Development Commission launched its flagship report: Better Business, Better World.
The report identified an economic prize in 2030 that could be worth more than US$12 trillion annually as a result of sustainable development growth for the private sector across four key areas – food and agriculture, cities, energy and materials and health and well-being. Perhaps most importantly for Asia is that over 55 percent of the value of these opportunities would result in making 220 million jobs available in the market, according to the report.
Science-based sustainable solutions
As macro-economic and environmental change moves forward, it is clear that opportunities to help shape the future environment will increase exponentially for companies that seek science-based, sustainable solutions.
The time is right for bold, strategic, commercial and sustainable initiatives which recognize the existential threat of climate change and the inevitability of a low carbon future. The economic prize – US$12 trillion – is there if we choose to take it.
It will not be easy. The inevitable transition to a low carbon economy will particularly challenge traditional high emissions industries. To thrive, some of them may have to reinvent themselves. This century may well be one in which business have one choice: to transform, or to be transformed. If not successful, it becomes a stranded asset.
DSM has come a long way since it started in 1902, and it has evolved from its original purpose into a global science-based company that is committed to developing sustainable resources across materials nutrition and health. The transition can be challenging and would require political will along with courage from the private sector to keep a steady focus on low fossil carbon innovations. The transition can be challenging and would require political will along with courage from the private sector to keep a steady focus on low fossil carbon innovations.
The science of climate change is relentless and the clock is ticking faster than our actions. Continuing as we have in the past is no longer sustainable, as it will result in a future of stranded assets and increase adverse impacts from climate change on the world. While we are presented with the possibility of a new world, we cannot simply disregard the pertinent issues that can be surmounted. There is a need to renew our hope by accepting our moral obligation and responsibility to take care of our home, Earth.
Should we try to change this world or prepare to leave it?
I’m for change.