Earth Protect Blog

Our 2011 predictions were about 80% right. So we have made 4 predictions for 2012: Sustainability as a profit driver; Focus on the ‘how’ of sustainability; Innovation, and; LED lighting.

To see whether our predictions for 2012 are worth reading, let’s see how 2011’s predictions fared (for the original predictions see http://drgreglavery.wordpress.com/5-low-carbon-predictions-for-2011/).

1.    Energy efficiency is now being taken seriously and is widely recognized as the low risk ‘quick win’ to kick-start a company’s sustainability efforts with rapid payback.

2.    The Marginal Abatement Cost Curve (MACC) has managed to hang on for another year, but the Emission Reduction Investment Curve (ERIC) is the most popular topic on Greg’s blog so interest is clearly increasing (see http://drgreglavery.wordpress.com/erics-replacing-maccs/).

3.    Offshore wind saw its biggest growth year to date in 2011. According to the EWEA, 150 GW of offshore wind projects are now in various stages of planning in Europe. In 2011, an estimated 1,000 MW was installed in European waters, bringing total installed capacity to 3,294MW. The UK saw an increase of two-thirds in electricity from offshore wind in first three quarters of 2011 and now has enough installed wind capacity (onshore plus offshore) to supply more than 3,300,000 homes. This growth saw many companies entering the sector in 2011.

4.    2011’s Fukushima disaster and Germany’s consequent decision to shut down nuclear has left gas as the most likely transition solution to a renewable energy economy. The predicted supply concerns have intensified and are likely to worsen in 2012 as the environmental impacts of fraccing become more widely known and create doubt about viable coal seam gas volumes. This will further increase scrutiny of China’s likely gas sourcing strategy and impact on global gas demand.

5.    China asserted its dominance of wind and solar manufacturing in 2011, which, combined with a tough market, resulted in the shut-down of BP Solar and German-based Solon, and the bankruptcy of US companies Solyndra, SpectraWatt, and Evergreen Solar.

We score ourselves around 80%, with all 5 directionally correct.

So for 2012, what do we expect?

1.    Sustainability as a profit driver. A number of recent studies have demonstrated that laggard companies have recognized the need to up their game because they are missing out on substantial value including new products, new business models, cost reduction, risk reduction, staff engagement, licence to operate, and brand enhancement. Projecting forward, 2012 may be the year when the majority of companies become proactive about capturing sustainability rather than being reactive/compliant. For a longer discussion of the benefits on offer see http://www.laverypennell.com/wp-content/uploads/2011/11/Lavery-Pennell-New-Value-viewpoint.pdf.

2.    Focus on the ‘how’ of delivering sustainability. In our discussions with clients and on project work, we see increasing attention being paid to the practicalities of implementing a more sustainable approach – both top down using formal change levers and bottom up by engaging with staff and harnessing their enthusiasm for creating a better world. Many companies understand the ‘why’ and the ‘what’ of sustainability, but even those who have made significant progress can struggle with the ‘how’. We predict a strong focus in 2012 on how to embed sustainability into organisations.

3.    Innovation as a key contributor to, and profitable output from, a more sustainable approach to business.  Companies are rediscovering the power of innovation to drive both profitability and sustainability.  It is the actions of line staff on a day-to-day basis that drives much of the environmental and social impact of a company, so good sustainability programs are engaging with line staff and providing them with formal and informal tools and support to encourage, capture, develop and share ideas. This innovation focus is improving company sustainability, identifying new profit improvement opportunities, and increasing staff morale.
4.    A boom in LED lighting. Costs have decreased and quality increased to the point where LED lights are economically more attractive than alternatives on a whole-of-life basis. The growth in LED lighting will be assisted in the UK by the phase-out of incandescent bulbs in 2012 and the Green Deal. Note that some countries such as Australia have already phased out incandescents and a large number of other nations (including China, the US, and across Europe,) have either begun the phase-out or have plans to do so in the near future. See http://en.wikipedia.org/wiki/Phase-out_of_incandescent_light_bulbs for more information.

We welcome your thoughts on these and wish you a prosperous 2012.

Greg Lavery, Nick Pennell and the Lavery Pennell team
http://www.laverypennell.com