In advance of the UN Global Compact Network Singapore Summit next month, we caught up with Pieter Nuboer, President of DSM APAC, to find out why the world needs to switch to a low-carbon economy, and how leaders of big business must drive the transition.
The Intergovernmental Panel on Climate Change (IPCC) has issued repeated warnings of the catastrophic consequences should the world exceed 1.5 degrees of warming. Although nearly 200 nations outlined plans to reduce emissions following the 2015 Paris Agreement, more drastic measures are needed if we are to meet the 2050 target of net-zero carbon emissions. Following last month’s UN Climate Action Summit, UN Secretary-General António Guterres reiterated the cold hard facts. And although 77 countries and 100+ cities subsequently committed to achieving the 2050 milestone, will they be able to back up the intention with real action?
To get anywhere near hitting these targets, governments, consumers, and importantly, businesses need to make an urgent, concerted effort to push the low-carbon agenda. Recent reports show that just 100 companies are responsible for 70% of global carbon emissions. And if we are to succeed in hitting the 2050 target, organisations must reevaluate and change their approach. But what does a low-carbon world look like? How can big business change? And what happens if business leaders continue to ignore science?
The upcoming GCNS Summit intends to explore this theme with business leaders across APAC. In advance of the summit, we caught up with Pieter Nuboer, President of DSM Nutritional Products Asia Pacific, one of the global leaders in scientific solutions in nutrition, health, and sustainable living. He explained how organisations can thrive in a low-carbon world, how DSM puts sustainability at the heart of its corporate strategy, and why the transition must start now.
Why is it essential that Singapore, and indeed the world, transition to a low-carbon economy?
“With the projected significant increases in population, Asia is facing increasing demands for resources and energy to drive prosperity for society at large. At the same time, it is becoming very clear that with our current patterns of production and consumption, these demands cannot be sustained within planetary boundaries. All major industries from food and nutrition to materials need a radical overhaul to meet the 2030 Sustainable Development Goals. These are not optional goals that are “nice to have”. This is not just about ensuring the survival of business bottom lines but really about safeguarding the future of our broader ecosystem in the long run. As Singapore’s Prime Minister recently reiterated, climate change is an “existential” issue. If we do not do anything now, future generations will hold us to account, as they are already doing and rightfully so. We need to foster and accelerate a much-needed and drastic transition to a low-carbon economy. Major shifts towards renewable energy and reduction of waste are of paramount importance.”
It’s widely reported that just 100 companies are responsible for 70% of the world’s carbon emissions. What advice would you give, or what would you say to the leaders of these organisations?
“First and foremost, we need to normalise the concept that sustainable business is good business. And that creation of shareholder value regardless of the cost to society is not an option – it should never have been an option, and certainly, it no longer is. Creating value for society at large is the only option going forward. Industry majors have recognised this imperative of adopting sustainability at the very heart of their strategies, setting bold targets in the process. Furthermore, through powerful alliances such as the UN Global Compact and the World Business Council for Sustainable Development they shape cross-sector collaboration to accelerate the broader transition to a more sustainable society.
Organisations that transform their operations and portfolios integrating sustainability across their value chains stand to benefit the most from the transition to a low-carbon economy. While making these fundamental changes is deeply complex, it has proven to be doable with the right leadership in place. Public awareness is on the rise, and ultimately, consumer demand for products and solutions that damage our ecosystem will simply and rightfully cease. Ultimately, organisations will have no option other than, where needed, to repurpose their business and transition to create value for all stakeholders, including customers, employees and society at large.”
What practical actions has DSM taken in moving towards a low carbon future that proves businesses can change?
“At DSM, we are fully committed to reducing our carbon footprint both in our operations and through our partnerships. Since 2018, we have committed to a 30% absolute reduction of direct GHG emissions and emissions from our purchased energy by 2030 (compared to 2016), and reduce indirect value chain emissions by 28% per ton of product produced in the same period. As a complementary target and aligned with the same time frame, we also have a goal to achieve 75% renewable purchased electricity by 2030. DSM has also set a long-term target to reach net-zero emissions before 2050. One of the most significant actions we have also taken was to apply an internal carbon price of €50 per ton of CO2 equivalent. This guides all our investments and operational decisions, meaning that environmental costs are integrated into our business right at the outset.
Not only do we improve our operations, but we also enable our customers to do the same. In the automotive industry, which continues to shift in pursuit of further optimising fuel efficiency and reducing emissions, we see the potential for R&D as a motor for growth. For example, we continue to drive innovation in terms of new materials that are stronger, lighter and more heat resistant than those traditionally used in car bodies and engines. Lighter cars translate to greater fuel efficiencies and therefore, lower CO2 emissions across the industry.
As renewables gain much-needed traction, there is a demand for continuous efficiency gains. For solar energy applications, we have therefore created endurance backsheets that protect the whole panel from harsh environmental conditions. The impact for this solution is that the panels are more stable, require less maintenance and can perform well at higher yields for much longer. Also, these backsheets are 100% recyclable with no production waste and have a 30% lower CO2 footprint than the traditional fluorinated backsheets.
DSM is also active in the food value chain. As a consequence of the recent EAT-Lancet report as well as the IPCC’s special report on climate change and land use, the damaging environmental impact of the current food system is now increasingly at the forefront of public consciousness. For over a decade, DSM has been investing in related research topics. As a result, we are now bringing to market a breakthrough feed additive that will enable the livestock industry to reduce methane emissions dramatically. Methane is an even more damaging greenhouse gas than carbon dioxide, and it is encouraging that we can find science-based solutions to help address this issue.”
What do you envision a low-carbon future to look like?
“Energy-dense and flexible – this has been the essence of fossil fuel’s success, and it will be hard to replace that fully. Yet through cutting-edge technology, we can now envision an economy that can prosper without overreliance on oil. Today advances in renewable energy are already dramatically reducing its costs and making it highly competitive against fossil fuels. Undoubtedly the accelerating pace of technology will, therefore, reduce the reliance on fossil fuels, and it has to. A low-carbon economy on a global scale is imperative. Unless we change, our planet simply cannot and will not equitably support the wellbeing of 9 billion people, let alone 7 billion.”
What are the business and societal benefits of a low-carbon economy?
“There is no question that the low-carbon economy is the only way forward. If climate change is allowed to continue unchecked, whole communities are at risk of being displaced, representing a massive risk in terms of food security and political stability. Business and society can no longer be seen as separate topics: business cannot succeed without a society that thrives nor vice versa. Instead of focusing on short-term profits in isolation, businesses that take innovation seriously and make bold and actionable plans will ensure the long-term value of their products and services and maintain the social licence to operate. In turn, society at large will benefit from the large-scale investments and developments that the private sector is best placed to drive.”
Register here to join the discussion and find out more about this year’s GCNS Summit taking place on 12 November 2019. Hear more from Pieter Nuboer at the summit during the Thriving in a low carbon world – envisioning the transition breakout session.