Call to Action for INSEAD Alumni; how can you advance a sustainable energy transformation?
Find your intrinsic motivation to really start using your influence. Take a serious look into the mirror every morning and ask yourself “How do I want to leave this planet for the next generations? How can I do everything possible within my personal control, to make this happen and use my influence in society?”
This was the advice offered to more than 50 Dutch INSEAD Alumni who gathered on Wednesday, March 30, at the Nieuwe Poort. The Nieuwe Poort is a place for rest and reflection. It’s a Force for Good in the center of the hectic financial business district Zuid As, in Amsterdam. It’s also a place where socially distant young people get the opportunity to build or rebuild their lives.
For the first time, both the INSEAD Energy Club and the Sustainability Club joined forces to organize an event. The mission was to explore how to make the transition to sustainable energy more sustainable?
Panelists Stientje van Veldhoven and Arnoud Balhuizen shared their opinions and insights at this first, in-person event since the start of the COVID pandemic. The main themes that emerged in the exploration were problem substitutions, geo-politics, incentives, innovation and taking up authority.
We are at a pivotal time in history to address climate change. We have only 8 years left to reach agreed emission reduction targets. Yet too often we fail to think systemically about the challenges we’re facing and end up solving short-term problems by creating other longer-term ones. As an example, Stientje shared with us a supposed solution of biofuels, but their production would require deforestation, equaling the size of the Netherlands! The consumption of resources by Europe is disproportionally high and not sustainable from a global perspective.
This global geo-political perspective is also required to prevent solving one sourcing problem without creating another one. The invasion of Ukraine by Russia makes painfully obvious how complacent Europe has been regarding its dependence on fossil fuels from Russia. But the tragedy could also provide an impetus to the energy transition in Europe. This raises other considerations. In the process of decarbonizing energy, how will “solutions” increase the dependence on China? Which countries produce enriched uranium required for nuclear energy? Other well documented nuclear energy related challenges remain, such as the long time required to build a plant and the waste problem.
This dependency challenge does not only relate to energy, but to materials as well. Arnoud shared that, for instance, the use of copper in the next 25 years will be larger than the copper consumption over the last 600 years! Amongst others, driven by the increase of electric vehicles. Meanwhile, the two most recent copper mines that are planned to go operational, have been opened by two Russian companies. Despite these geo-political realities, opportunities to recycle resources through waste treatment remain underdeveloped. The Chinese Belt and Road initiative is another example of the long-term global power game for resources. Some countries are better at taking a long-term perspective than others.
Innovation can also help a great deal to reduce the use of materials. What if cars are so well communicating with each other, steered by artificial intelligence, that we can substantially reduce their weight and therefore energy consumption?
In Europe, some progress has been made in terms of decarbonizing energy. But it is mainly progress on paper. Ten years ago, sustainability was low on the political priority list. This changed after the Paris Climate Agreement in 2015. This is good news, but we are at risk of losing the vital sense of urgency. We should not expect our politicians at national or European level to do the work for us to achieve the Paris Climate Agreement objectives.
The clear message conveyed by Stientje and Arnoud is that there’s no time left to wait and see. We can’t afford anymore to look at each other and expect a silver bullet to sort out all our problems. Looking at solutions from different perspectives is important. For example, hydrogen has great potential. But not to create energy and not in all potential applications. Its purpose is to store energy, while transporting hydrogen is difficult and requires energy. Solutions must be seen in context. Another example that was shared is the highly effective geothermal energy production in Nigeria.
To look at other countries and expect them to solve the global warming by, for example, reducing the use of coal is not going to be the silver bullet either. Developing countries are taking a different perspective. In their views, over the last 100 years, the developed countries created the mess we’re in and now the developing countries have to clean it up? The Western world should support developing countries with technology and incentives.
Providing meaningful incentives will be encouraged by including the costs of a products’ carbon footprint in its final price. A precondition for an effective pricing mechanism would be regulation and a well-functioning Emissions Trading System (ETS). But other non-monetary incentives are also in play. How does your company’s public sustainability image help to attract talent? Ultimately, the best argument to invest in green technology is business success. Fortunately, there are plenty of business case successes to inspire us.
Summarizing, after a lively discussion, the call to action for INSEAD Alumni to make a difference and inspire within their own locus of control, is timely. Believe in your own capability to change the world. In addition, we were advised to improve our listening skills (especially the Dutch people in the room) and recognize the need for balance and nuance.
Stientje van Veldhoven: Regional Director Europe of World Resources Institute, former Environment Minister
Arnoud Balhuizen: HAL Investments, former Chief Commercial Officer BHP Billiton