“Risk” not “responsibility” is the watchword of 2013
In this interview with the United Kingdom-based Ethical Corporation magazine (www.ethicalcorp.com)Tom Burke says business needs to wake up to the interconnected nature of risks such as resource security and climate change.
Tom Burke is currently an Environmental Policy Adviser to Rio Tinto and a Visiting Professor at Imperial and University Colleges, London. His other roles include Senior Advisor to the Foreign Secretary’s Special Representative on Climate and a Founding Director of environmental non-profit E3G. He has recently been appointed to the External Review Committee of Shell and the Sustainable Sourcing Advisory Board of Unilever. He is a former Executive Director of Friends of the Earth and has been Special Advisor to three Secretaries of State for the Environment.
In your view, what are the big issues to watch out for in 2013?
I think that climate change is going to be a big issue. That’s partly for the same reasons. There’s also a growing recognition of the effects that a change in climate is going to have on business. The extreme weather events of the last year are a harbinger of things to come. Companies need to be making sure that they have a good story to tell about how they're going to handle climate change risks. It’s important to point out that these risks relate back strongly to food and water security risks as well.
In the year ahead, I expect we're going to hear much more from “climate takers” – that is, those people who have got to live with whatever the climate delivers. So far, they’ve been broadly silent and have left the debate to the “climate makers”: i.e. the fossil fuel industry and their customers.
Turning to the extractive industry in particular: is there a big issue on the horizon for 2013?
I see water security as being a major issue in the coming year. I think people are going to be somewhat blindsided by it. It's not obvious, for example, that if a drought in America dries up the Mississippi then this might impact communities around a mine site in Africa. For extractive companies this is obviously important because they put billions of dollars into the ground. That means they have to be really confident that the social context around them is going to remain stable, which makes food and water very important issues. What's happening in Peru should be a real wake-up call where water is a big driver in a lot of the problems that the extractive industries are having.
Keeping with climate change, do you think we should continue with mitigation policies or do you think the time has come to shift to adaptation?
You have to do both. To reduce the amount of adaptation required, however, you obviously have to do more and act faster on mitigation. Otherwise adaptation becomes more difficult and more expensive.
What are your personal priorities for 2013?
My personal goal is to get the businesses that I work with to retain their capacity and attention on what I call the exogenous risk landscape. By that I mean the risks that they are exposed to because of what other people do or don't do. Within that context, my particular priority is to get them to understand that they've got to be asking more of governments. So a large part of the year ahead will be focused on getting different people to start encouraging politicians to respond to the growing systemic risks around food, energy, water and climate security.
Do you feel that governments across the board aren’t doing enough to promote sustainability?
Put it this way, I'd be hard pushed to find a government that's really leading any kind of shift towards genuine sustainable development. No government is currently demonstrating a willingness to take on board the scale of change that is required. The risks I mentioned before – around climate change, water security and so forth – are frankly not being addressed by government. That’s serious because these [risks] are going to make life increasingly difficult for the business world and for everybody else.
Which would you say are the sectors to pick when it comes to corporate responsibility in the year ahead?
I wouldn't pick any single sector. Obviously the extractive industries tend to put larger amounts of money into places because they can't move and that increases their exposure. But I think all sectors are exposed to the consequences of political failure to manage the risk nexus. In my opinion, companies need to increasingly shift their attention from responsibility to risk. So if you like, my theme for the year is 'beyond responsibility'. Of course, society has to play its part too.
You are scheduled to speak at Ethical Corporation’s upcoming Annual Extractives Conference. What issue will you be addressing?
I'm going to be talking about exactly this idea - moving beyond responsibility and into risk. I firmly believe [that] there needs to be a more mature conversation between business, governments and civil society about how we manage the nexus of risks around climate and food security, water security, energy security and climate security. These risks are all interrelated. I don't fundamentally believe there is a resource scarcity issue. In fact, I think McKinsey has done the world a great disservice by focusing on scarcity rather than on security. So I’ll also be talking a lot about the difference between scarcity and security.
Tom Burke will be speaking at the 4th annual CSR for Extractives Industries Summitin London, April 3rd-4th at the keynote session on how Rio Tinto moves from a 'reactive' CSR to an integrated risk management system. For more info: www.ethicalcorp.com