Review: Climate Change: What's Your Business Strategy?

No matter what your company does or where it's located Climate Change is going to have an impact on your business.

As CEO, it is imperative you understand the potential impacts and opportunities presented by the issue.

But with the tremendous amount of noise out there, on both sides of the issue, it may be difficult to sift through it to find the right information to inform your business decisions and strategy.

Along comes a slim volume in Harvard Business Press' Memo to the CEO series, Climate Change: What's Your Business Strategy? by Andrew J. Hoffman and John G. Woody.

Short enough to read on your next transcontinental or international flight, this book provides all the background, current thinking about impacts and opportunities, and upcoming policy decisions that will affect your business.

You will also learn how some of the most successful companies are getting ahead of the game. Companies like SwissRe, which has come up with a three-tiered approach to reducing greenhouse gas emissions (GHG), or Duke Energy, which is anticipating regulations to come and making sure they have a seat at the table when they are secured.

Hoffman, associate director of the Erb Institute for Global Sustainable Enterprise, and Woody, a deal associate at MMA Renewable Ventures, have devised a simple, three-step approach for you to follow to best position your company.

Beginning with understanding your company's carbon footprint and taking action to reduce its size, Hoffman and Woody walk you through assessing the business opportunities and how to influence policy as it's being developed.

"Some business associations and lobbyists still dispute the science of climate change, but their numbers are dwindling," the authors conclude. "And businesses themselves are focusing on the undeniable economics of the problem. While some companies are adapting out of near-term operational necessity, others are acting to mitigate long-term strategic vulnerabilities, and the most forward-thinking are seizing on new business opportunities created by climate change and devising ways to make money from clean energy and efficient technology."

Pick up Climate Change: What's Your Business Strategy? and read it, have your management team read it, and then decide what your company needs to do to stay ahead in the game.

Clean Tech: Market Folly's How To Play Energy in the Intermediate Term

My blogging pal over at Market Folly (check out his in-depth series on Hedge Fund 13F's here) has been dipping into alternative energy stock analysis now and again, and we've swapped interesting companies to watch and some sector research.

His recent post caught my eye because he's reviewing both the recent Economist special report, which I have read, and a piece in Forbes, which I haven't. And because I'm on vacation in Alaska, I'm going to reblog his post here in hopes that my readers will find it useful:

Check out Market Folly's How to Play Energy in the Intermediate Term. And subscribe to his RSS feed for future reading.

Clean Tech: The Economist Looks at the Future of Energy

The energy landscape is changing, says The Economist, but where is it heading?

This week's issue (21 June) has a special report looking at the options facing the world, including alternative sources and

The market for energy is huge. Estimated at US$6 trillion a year, it accounts for about a tenth of the world's economic output -- and by 2050, power consumption is likely to have doubled from today's levels. High fuel prices and worries over energy security and global warming mean that a technology boom based on alternative energy may soon be upon us.

Wind and solar both are approach cost parity with traditional sources, at least in terms of new development. Biofuels caught on and we were all heading to Abilene with them, until some folks pointed out the issues with corn- and other food-based sources. And even electric cars and nuclear power seem to be rising from the dead.

It's clear the future of energy must change if economic development and prosperity are to continue.

The Economist report looks at the full range of alternative energy options that may fuel the new green economy and asks the critical question, can they break our addiction to oil and coal?

Clean Tech: Alternative Energy Execs Dream Of Oil Crunch (Reuters)

Gerard Wynn of REUTERS NEWS SERVICE writes from London that "while most companies are watching soaring oil prices with an eye on rising costs some renewable energy executives are licking their lips at the prospect of 'spectacular' growth."

Here's the article:

"Oil sped above $135 to a new record for a third straight day on Thursday. That and new forecasts of a higher floor price has some alternative energy suppliers dreaming of an era of peak oil when global crude output starts to fall.

"'Our time is very definitely coming,' said Jeremy Leggett, chairman of British solar power company Solar Century and former environmental campaigner. 'The world is going to be beating a path to our doors ... The oil crunch is coming soon. The drivers are going to be spectacular.'

"Thursday's record oil price knocked world stocks to a one-month low as concerns grew that rising raw material costs would hit companies and consumers in an economic slowdown.

"In their latest rally since May 1 oil prices have risen 20 percent. In that time the MSCI index of the world's biggest stocks is up 1.5 percent, while a ABN AMRO index of renewable energy stocks has climbed 9.5 percent.

"But support for renewables has been jittery after months of hype helped fuel valuations at a time of tight credit.

"In particular, solar power stocks dived as much as 50 percent in January as investors feared that a credit crunch would make 'big ticket' solar panels unaffordable and that over-capacity in the sector could swamp demand.

"'There's obviously been underlying concern in the renewable energy markets that valuations are inflated, (asking) are we in the middle of a green technology bubble,' said Merrill's head of carbon emissions trading Abyd Karmali.

"'Drivers in the oil market leading to higher oil prices, as well as expected more sustained carbon pricing... lead us to suggest that actually alternative energy is going to be commercially viable sooner than people anticipated.'

WIND GOOD, SOLAR BAD

"But even $135 oil is not enough to make all alternatives competitive, said the Chief Economist to the International Energy Agency, Fatih Birol, on Thursday -- using the example of electricity production from the sun called solar PV.

"'We need to see a lot of reduction in the cost of PV.'

"Solar power executives said at a conference hosted by Greenpower on Wednesday that an expected glut in capacity -- to 29 gigawatts of solar module production in 2012 from 3 GW in 2007 according to consultants McKinsey -- would slash prices.

"The solar power industry uses expected year on year increases in power prices -- as a result of soaring oil and gas prices -- to try and plot when solar power without subsidies will be the same price as conventional electricity.

"McKinsey's Christer Tryggestad said such grid parity may be reached as early as 2010 or 2011 in Italy and California.

"But at current oil prices wind has already reached that point, said the IEA's Birol.

"'Many many projects which are on good sites become profitable versus gas,' he said.

"Ad van Wijk, chief executive of Netherlands-based renewable energy project developer Econcern, said wholesale power prices had trebled in the past two years -- as a result of soaring oil prices -- making his on-shore wind projects competitive with natural gas on windy sites, without subsidies.

"'It's the high oil price and especially the outlook that they will not go down,' which means he can get high wholesale prices now, said van Wijk.

"Analysts and industry officials have predicted for decades that the world's oil output may soon plateau but oil companies have downplayed the 'peak oil' theory. BP data suggest the world has proven oil reserves of 1.2 trillion barrels, enough to sustain current output for 40 years.

"Nevertheless, oil firms are using higher price assumptions to plan their businesses, in a sign the forecast floor price is moving up, oil analysts say. BP is using $60 a barrel, for example, while just a few years ago companies assumed long-run prices of $25."

Salzburg Global Seminar: My 3 Take-Aways from Green Revolution in Africa Dialog

Readers of this blog will note that my "Three Take-Aways" exercise is becoming more formalized. Here are my three from this week's Salzburg Global Seminar "Towards a 'Green Revolution' in Africa?"

1.) A Green Revolution in Africa must be people-centered, including farmer households, consumers, and local communities.

2.) A range of solutions must be considered and deployed, including a judicious use of inputs (inorganic fertilizer, improved seed), as well as a longer-term view that promotes organic inputs to improve soil health and structure and increase production. We also can't rely on monocultures of a few major staples, but must employ the full diversity of locally and culturally appropriate food crops.

3.) Investments are needed to create the infrastructure to improve market access, including significant road development and incentives for entrepreneurial business generation. Without roads, in particular, market access will continue to be limited and success out of reach.

And, finally, words of encouragement from Kofi Annan concerning entrepreneurs in Africa (especially women): "Don't underestimate the entrepreneurial spirit of our African women. Our women entrepreneurs can succeed against any multinational."

My bottom line: An entrepreneurial Green Revolution in Africa is possible indeed.

(En route to Munich from Salzburg. Composed on BlackBerry. Links to follow.)