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Transcript From “WINDS OF CHANGE”- The Role Of Business In Environmental Sustainability.

06/06/2007

A Speech Delivered 6 June 2007, Burswood Dome, Perth Spirituality & Sustainability Forum By Brett Godfrey, Chief Executive, Virgin Blue Airlines


GOOD MORNING...AND WELCOME.


I WISH TO OFFER MY THANKS TO HIS HOLINESS THE DALAI LAMA FOR ALLOWING ME TO BE INVOLVED AND PRESENT HERE TODAY. I FEEL ESPECIALLY HONOURED TO KNOW IT IS RARE FOR A CORPORATE LEADER TO PARTICIPATE AND I HOPE I MAY DO JUSTICE TO THE INVITATION.


AS THE CEO OF AN AIRLINE, MY PARTICULAR SKILL IS NOT KNOWING HOW TO FLY A PLANE, NOR HOW TO MAINTAIN ONE. WE HAVE MANY SMART PEOPLE WHO DO THAT. MY RESPONSIBILITY IS SIMPLY ENSURING “GOOD JUDGEMENT” ON THOSE DECISIONS WHICH IMPACT THE PERFORMANCE OF OUR BUSINESS.


I HAVE TO MAKE DECISIONS IN THE SHORT, MEDIUM AND LONGER TERM, SOMETIMES AS FAR AS 1O YEARS AHEAD AND FURTHER.


TO DO SO, I GATHER ADVICE FROM MANY SOURCES, LISTEN TO THE EVIDENCE, BALANCE THE ARGUMENTS AND THEN MAKE A CALL ON INVESTMENTS, OPPORTUNITIES, PRODUCT DEVELOPMENTS, BUSINESS POLICIES AND MANY OTHER AREAS ON BEHALF OF OUR ORGANISATION AND ALL OF ITS STAKEHOLDERS – SHAREHOLDERS, GUESTS, OUR TEAM, THE GREATER COMMUNITY.


IF I APPLY THIS PRINCIPLE TO THE CONCEPT OF GLOBAL WARMING, AND I HAVE, THEN WHO AM I TO SAY THE MORE THAN 2,000 SCIENTISTS FROM THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE ARE WRONG BECAUSE OF A FEW DISSENTERS, MANY OF WHOM HAVE BEEN SUPPORTED BY THOSE WITH VESTED INTERESTS.


THE CONSENSUS OF THE IPCC SCIENTISTS IS THAT THEY ARE NOW SATISFIED THE ARGUMENT IS OVER. THEY SAY “IT IS HIGHLY LIKELY (GREATER THAN 95 PER CENT PROBABILITY) THAT THE GLOBAL WARMING OBSERVED DURING THE PAST HALF CENTURY CANNOT BE EXPLAINED WITHOUT FACTORING IN HUMAN ACTIVITY."


FURTHERMORE THEY SAY THAT GLOBAL TEMPERATURE RISES OF BETWEEN 2 AND 4.5 DEGREES CELSIUS ARE ALMOST INEVITABLE IN THE COURSE OF THIS CENTURY – BUT MUCH HIGHER INCREASES OF 6 DEGRESS OR EVEN MORE CANNOT BE RULED OUT. AND YET THEY BELIEVE THAT BASED ON MANY OTHER FACTORS THE SYSTEM OUGHT TO BE PRODUCING GLOBAL COOLING RIGHT NOW, IF IT WERE NOT FOR THE HUMAN FACTOR.


THEY BELIEVE THE IMPACT ON THE PLANET IF THIS IS LEFT UNCHECKED, WILL BE CATASTROPHIC. OUR COUNTRY IN PARTICULAR IS HIGHLY SUSEPTIBLE TO CLIMATE CHANGE AND IT WOULD BE UNRECOGNISABLE COMPARED TO WHAT IT IS TODAY.


RESPONDING TO THIS SUSTAINABILITY MESSAGE BASED ON THE OVERWHELMING SCIENTIFIC EVIDENCE HAS BEEN ONE OF THE EASIEST DECISIONS I HAVE YET TAKEN IN 7 YEARS DEVELOPING VIRGIN BLUE.


MY OWN AWARENESS ABOUT THE ISSUE OF CLIMATE CHANGE CONTINUES TO GROW AND I HAVE BEEN ASKED TO SHARE OUR EXPERIENCE AND SOME THOUGHTS I HAVE ABOUT THE CHALLENGES AHEAD AND THE ROLE THAT BUSINESS CAN AND MUST PLAY IN ADDRESSING CLIMATE CHANGE.


BY OPERATING AN AIRLINE, I HAVE COME TO BE ACUTELY AWARE OF OUR OWN INDUSTRY’S CONTRIBUTION TO GREENHOUSE GAS EMISSIONS AND THEREFORE THE CHALLENGE OF BALANCING BUSINESS REQUIREMENTS WITH ENVIRONMENTAL CONCERNS.


THE AUSTRALIAN BUSINESS ROUNDTABLE ON CLIMATE CHANGE INVESTED IN TWO KEY PIECES OF RESEARCH. ONE BY THE CSIRO WHICH WAS LOCALLY FOCUSSED BUT CONSISTENT WITH MUCH OF THE GLOBAL FINDINGS OF THE IPCC. IT CONCLUDED, THAT “ACTING EARLIER TO CUT EMISSIONS NOT ONLY REDUCES DAMAGE, BUT BUYS US MORE TIME”.


THE SECOND REPORT (ALLEN CONSULTING GROUP) MODELLED THE COST TO AUSTRALIA OF REDUCING BY 60% OUR YEAR 2000 EMISSIONS BY 2050.


THE FINDINGS WERE THAT THE PRICE FOR ACHIEVING A 60% REDUCTION WHILE STILL MAINTAINING STRONG ECONOMIC GROWTH IS MANAGEABLE. THE ONE PROVISO IS THAT WE ACT QUICKLY. OUR AVERAGE GDP OVER THE PERIOD TO 2050 WOULD BE EXPECTED TO DROP BY A MERE 10 BASIS POINTS FROM 2.2% TO 2.1%. THIS IS NOT INCONSISTENT WITH INTERNATIONAL STUDIES. THE ALLEN REPORT DEDUCED THAT THE NINE YEAR “DELAYED ACTION SCENARIO” WOULD HAVE CONSIDERABLY HIGHER COSTS IN TERMS OF ENVIRONMENTAL DAMAGE AND ECONOMIC IMPACT.


UNTIL RECENTLY IT WOULD BE FAIR TO SAY MANY BUSINESSES HAD NOT YET FOCUSSED AT ALL ON THE ISSUE OF CLIMATE CHANGE PERHAPS PARTLY BECAUSE OF THE BURDEN OF RESPONSIBILITY. THIS IS NOW CHANGING.


ATTITUDES HAVE SHIFTED SHARPLY OVER THE PAST FEW YEARS, MOST NOTABLY AMONGST BUSINESS LEADERS. WE ARE BEGINNING TO SEE THE FIRST REAL WINDS OF CHANGE PROMPTED BY AWARENESS AND CONCERN IN THE BROADER COMMUNITY, BUSINESS AND INDUSTRY, AND IN STATE AND FEDERAL GOVERNMENTS.


BUSINESS WAS SLOW IN ACCEPTING THE SUSTAINABILITY ISSUE, BUT THEY ARE NOW RECOGNISING THAT IF GREEN LAWS ARE TO BE ENACTED, IT IS FAR MORE PREFERABLE TO BE ON THE INNER SANCTUM AND PARTICIPATE IN THE DESIGN OF FUTURE LEGISLATIVE CHANGE.


IT IS ALSO LIKELY THAT MANY COMPANIES ARE LIKELY TO BE MORE INSPIRED BY THE “CARROT” OF STRATEGIC AND BUSINESS OPPORTUNITIES THAN BY THE STICK” OF REGULATION.


THE DEVELOPMENT OF CLEANER ENERGY MEANS NEW TECHNOLOGY AND NEW TECHNOLOGY TO COMPANIES, MEANS MONEY. AS CRASS AS THAT SOUNDS, NOBODY SHOULD BE OFFENDED BY IT. IRONICALLY IT COULD IN FACT BE THE PROFITABILITY AIMS OF THE CORPORATE SECTOR WHICH BECOME A KEY DRIVER IN REJUVENATING OUR PLANET.


THE PUBLICATION, THE ECONOMIST, SAYS THAT GLOBAL INVESTMENT IN RENEWABLE POWER-GENERATION, BIO-FUELS AND LOW-CARBON TECHNOLOGIES ROSE TO USD $71 BILLION IN 2006, UP 140% IN JUST TWO YEARS.


IN THE US, SHARE PRICES OF CLEAN-ENERGY COMPANIES HAVE BEEN SKYROCKETING.


PRIVATE EQUITY, IS PILING INTO THE SECTOR, CONVINCED THAT THEY CAN DESIGN REVOLUTIONARY TECHNOLOGIES, BRING DOWN PRICES AND TURF OUT THE “OLD GUARD” IN THE ENERGY BUSINESS JUST AS THEY DID IN THE SOFTWARE BUSINESS. OIL FIRMS, CARMAKERS, POWER GENERATORS, NERVOUS OF BEING OUTMANOEUVRED, ARE JACKING UP THEIR INVESTMENTS IN RENEWABLES AND BIOFUELS.


IN THE AVIATION INDUSTRY, THE TWO KEY AIRCRAFT MANUFACTURERS - BOEING AND AIRBUS ARE WORKING WITH ENGINE MAKERS AND THE RACE IS ON TO FIND THE “HOLY GRAIL” OF THE INDUSTRY – ALTERNATIVE AND RENEWABLE FUEL SOURCES FOR AIRPLANES.


I AM CONVINCED THAT WITHIN 5 YEARS, A STEP CHANGE WILL OCCUR IN OUR INDUSTRY AND WE WILL SEE BIO FUEL MIXTURES AND ULTIMATELY REPLACEMENT OF COMBUSTIBLE AVIATION FOSSIL FUELS.


MORE RELEVANT AND IMPORTANTLY, I BELIEVE CORPORATE AUSTRALIA IS STARTING TO WAKE UP THE BENEFITS OF OPERATING BUSINESS UNDER THE TRIPLE BOTTOM LINE PRINCIPLE. WE ARE BECOMING MORE ADEPT AT UNDERSTANDING THE BENEFITS OF THE INTERELATIONSHIPS BETWEEN PEOPLE, THE PLANET AND PROFITS.


WE AT VIRGIN BLUE ARE NOT THERE YET, BUT WE ARE MOVING IN THAT DIRECTION WITH DEVELOPMENT OF AN INTEGRATED ENVIRONMENTAL MANAGEMENT SYSTEM. WE HOLD UP OUR HAND AND SAY THAT WE MUST ACCEPT TO BE ACCOUNTABLE FOR THE DAMAGING BY-PRODUCTS OF OUR ACTIVITIES.


PUBLIC OPINION AND PUBLIC DISCONTENT WITH THOSE ORGANISATIONS THAT ADOPT A “HEAD IN THE SAND” APPROACH WILL SEE ORGANISATIONS CHANGE QUICKLY OVER THE NEXT COUPLE OF YEARS OR RISK FALLING BY THE WAYSIDE.


FIRSTLY, THE COST OF DOING SO IS NOT UNREASONABLE, CONSIDERING THE NORMITY OF THE CHALLENGE. TO ADDRESS OUR EMISSIONS IN LINE WITH KYOTO LIKE EXPECTATIONS, ASSUMING WE ACT IMMEDIATELY, THE IPCC ESTIMATES THAT IF WE WERE TO PLACE A PRICE ON CARBON TO BE INITIALLY PAID FOR BY THE POLLUTERS AT SOMEWHERE BETWEEN $25 AND $60 PER TONNE OF CO2, BY 2020-2030 WE SHOULD START TO SEE CO2 CONCENTRATIONS IN THE ATMOSPHERE STABILISE TO ACCEPTABLE LEVELS.


FIRSTLY, ALL LEVELS OF GOVERNMENT IN AUSTRALIA MUST TAKE THE DOMESTIC LEAD. WE MUST SET A LONG TERM GOAL OF REDUCING AUSTRALIA’S IMPACT ON THE ENVIRONMENT AND ULTIMATELY IN CONJUNCTION WITH THE WORLD COMMUNITY, AGREE LEVELS THAT WILL ALLOW SAFE AND STABLE LEVELS OF GREENHOUSE GAS EMISSIONS.


ADDITIONALLY, MEASURABLE AND ACHIEVABLE SMALLER TARGETS MUST BE ESTABLISHED TO ALLOW FOR INTERVENTION AND CORRECTION OF TARGETS ALONG THE WAY.


SECONDLY, WE MUST ALSO ACCEPT AND INITIATE A NATIONAL CARBON BASED TRADING SCHEME. THIS IS THE CLEAREST MECHANISM AVAILABLE TO INDUCE MARKET DRIVEN INVESTMENT IN NEW ENERGY SOURCES. IT IS WORKING IN EUROPE AND IS STARTING TO WORK IN AUSTRALIA WITH A GROWING NUMBER OF VOLUNTARY SCHEMES EMERGING.


THIRDLY AND FINALLY, BUSINESS AND THE AUSTRALIAN GOVERNMENT CAN AND SHOULD WORK TOGETHER ON A SOLUTION WHICH OFFERS TAX CREDITS AND OTHER FISCAL INCENTIVES TO UNLOCK PRIVATE ENTERPRISE IN RESEARCH AND DEVELOPMENT.


SO FAR THE WORLD HAS BEEN POLARISED ON THIS ISSUE, WITH OPINION DIVIDED


BETWEEN TWO CAMPS, THOSE WHO BELIEVE WE ARE HEADED FOR ALMOST CERTAIN DISASTER AND THOSE WHO SAY WE WILL ALL LOOK BACK ON THIS PERIOD OF CONCERN AND FEEL A LITTLE SILLY, AS REALLY THERE IS NO GREAT CAUSE FOR ALARM.


THE ANSWER IS ARE WE PREPARED TO RISK OUR PLANET’S FUTURE? THERE IS NO SECOND CHANCE FOR OUR GREATEST ASSET OF ALL. IF ULTIMATELY THE MAJORITY ARE WRONG, WHAT IS OUR EXPOSURE? LOOK AT WHAT WE WILL HAVE ACHIEVED FOR MANKIND, FOR OUR PLANET. THE OUTCOME WILL BE A CLEANER, HEALTHIER, GREENER PLANET FOR OUR SELVES AND FUTURE GENERATIONS.


IN THE SAME WAY THAT MASSIVE INVESTMENT TOGETHER WITH GLOBAL DEBATE ALSO SURROUNDED THE 18 YEAR SPACE RACE (1957-1975) BETWEEN THE UNITED STATES AND THE USSR AS IT WAS KNOWN THEN, WAS THE SPACE RACE ALL IN VAIN?


WE SENT PEOPLE AND SATELLITES INTO SPACE AND ULTIMATELY WE PUT A MAN ON THE MOON, BUT DID MANKIND BENEFIT AS A RESULT? DID WE PROGRESS? YOU BET WE DID. THE SPACE RACE LEFT A LEGACY OF ADVANCEMENTS WHICH WOULD NOT BE HERE TODAY HAD SCIENCE AND TECHNOLOGY NOT STRETCHED TO NEW LIMITS IN AN ACCELERATED AND PRESSURED TIMEFRAME.


ADVANCEMENTS EXTENDED WAY BEYOND ROCKETRY, PHYSICS AND ASTRONOMY TO FIELDS AS DIVERSE AS FOREST DEFOLIATION STUDIES, HOME ECONOMICS, WEATHER DATA, HUMAN MOVEMENTS, MEDICINE AND EDUCATION.


I BELIEVE THE SAME WILL OCCUR AGAIN. AS THE WORLD RESPONDS TO GLOBAL WARMING, AND WE WILL PRODUCE A LEGACY OF NEW TECHNOLOGY, SCIENTIFIC AND SOCIAL ADVANCEMENTS AS A RESULT.


WE HAVE BEEN TOLD THAT WE HAVE ABOUT 10 YEARS TO ACT, A SHORT WINDOW OF TIME BEFORE A POINT OF NO RETURN OCCURS.


WE NEED URGENTLY TO ENGAGE AS MANY PEOPLE AS POSSIBLE IN THIS CRITICAL


MESSAGE, HENCE THE IMPORTANCE OF THIS FORUM AND A KEY FOCUS OF HIS HOLINESS.


WE NEED BUSINESS LEADERS, SCIENTISTS, REPRESENTATIVES OF GOVERNMENT TO CONTINUE TO STEP FORWARD. WE NEED RESPONSIBILITY FOR ENVIRONMENTAL IMPACT TO BE INCORPORATED AT THE HIGHEST LEVEL IN ALL BUSINESSES, PARTICULARLY THOSE OF US WITH LARGE CARBON FOOTPRINTS, AND WE MUST ENSURE “BEST PRACTICE” ON THE MANAGEMENT OF OUR OUTPUTS.


IN THIS COUNTRY ALONE, LARGE LAND AREAS ARE SUFFERING THE WORST DROUGHT ON RECORD AND IN SOME MAJOR CITIES; WATER RESERVES HAVE DROPPED BELOW 20 PERCENT.


AROUND THE WORLD PEOPLE AND GOVERNMENTS ARE WATCHING, TO SEE HOW WE COPE, HOW AUSTRALIA RESPONDS TO CLIMATE CHANGE.


THIS MEANS THAT AUSTRALIA MUST STEP FORWARD AND JOIN THE WORLD ON THIS ISSUE. THIS IS THE ISSUE OF OUR TIME, OF OUR GENERATION. THE MESSAGE IS THAT CLIMATE CHANGE AND GLOBAL WARMING ARE UPON US. BUT IT IS NOT AN INESCAPABLE AND IRREVERSIBLE DESTINY. FORTUNATELY, SCIENTISTS WORLDWIDE ARE AGREED ON THAT.


AUSTRALIA CAN SET A GLOBAL EXAMPLE, BUT WE MUST INCREASE OUR RESOLVE AND WE HAVE NOTHING TO LOSE AND EVERYTHING TO GAIN FOR TRYING.


AND FINALLY IN CLOSING, I WOULD ASK YOU TO REMEMBER THIS…THAT EVERY SINGLE ONE OF US, EVERY INDIVIDUAL HAS A UNIQUE OPPORTUNITY TO CONTRIBUTE TO SUSTAINABILITY OF OUR PLANET.


WE CAN ALL MAKE A DIFFERENCE. WHETHER YOUR SPHERE OF INFLUENCE IS WITHIN YOUR OWN HOUSEHOLD, WITHIN A MULTI-NATIONAL COMPANY OR AT THE HELM OF NATIONAL OR INTERNATIONAL POLICY … THE ANSWERS LIE IN UNIVERSAL CONCERN.


THROUGH THE SUM OF THE ACTIONS OF INDIVIDUALS, BUSINESSES AND GOVERNMENTS EVERY ONE OF US HAS A RESPONSIBILIY TO BE PART OF THE SOLUTION.


AS I SAID, “YES I AM AN OPTIMIST”, BUT I FORGOT TO SAY THAT I AM ALSO A REALIST.


WE HAVE, HOWEVER, NO TIME TO WASTE.


LET US SEIZE THE DAY.


THANK YOU.


Key Sources Attributable to Content


4th Assessment of the Intergovernmental Panel on Climate Change

The Economist

The Research Papers of the Australian Conservation Business Roundtable