VALUES: Profits versus Planet

This is an extract from my latest book ‘Leaders Behaving Badly’: What happens when ordinary people show up, stand up and speak up. In this segment I will cover:

  • Short term gratification versus long term regret
  • The urgent need for leaders to become futurists
  • The costs of ignoring early warning signs
  • Factoring in costs versus benefits

Short-term gratification versus long-term regret. In August 2017, McKinsey & Company released a paper ‘The case against corporate short termism’ where they published their findings of a 14-year study of numerous companies that were willing to forfeit short-term gains for long-term sustainability. The full study is published in the Corporate Horizon Index.

They discovered that for the firms they identified that focused on the long term, average revenue and earnings growth were 47% more on average by 2014 even factoring in the global financial collapse. They estimate that the US GDP over the past decade might well have grown by an additional US$1 trillion if the whole economy had performed to the same level as their sample companies. They proved that shareholders in the long-term firms would have had a greater return on their investments.

For those business leaders who are charged with or are under pressure to focus only on their next quarter’s results, quality could be compromised, customer service will probably become secondary and long-term survival may actually be threatened.

For leaders in the movie sector or music industry who feel compelled to focus only on their ‘ratings’, they will almost inevitably revert to short-term decisions rather than investing in long-term strategies.

As for politicians who watch only their ‘polls’ while forgetting what they stand for and why people voted for them, then they will start to appear indecisive and ultimately untrustworthy.

Shareholders have a responsibility in short-term thinking also. If all shareholders care about is a fast return on their investment, then they too are complicit in the potential long-term damage that could be caused to people, communities and/or the environment. The urgent need for leaders to become futurists While so many of our leaders are behaving like managers, i

The urgent need for leaders to become futurists. While so many of our leaders are behaving like managers, i.e. managing the day-to-day of a business or country, they are avoiding or delaying or failing to realise that their job, their role and their responsibility is to actually look at the road ahead; to prepare people for what is coming. They employ people to manage the day-to-day.

Leaders need to be educators. If ever the world needed our leaders to join forces globally and to start preparing their followers for the future rather than encouraging them to hang on to an outdated past, it is now.

We are facing challenges on a global scale like nothing humans have ever faced before, and if we don’t start taking urgent action on some of those issues, then this planet could be at risk.

The cost of ignoring early warning signs. As early as the 1940s, a product called DDT (dichlorodiphenyltrichloroethane) was being used in agriculture to rid crops of pests, but which proved toxic to fish and birds. In a report called ‘Oceans release DDT from decades ago’ by Richard A. Lovett, it is estimated that even though its use was banned in the 1970s, its effect are still being felt in our oceans today.

Why did we not learn from that? And why are we still not learning?

Factoring in costs versus benefits. In 1990 the cod population of Newfoundland was decimated by ‘drag’ fishing. For a few years the results would have been amazing and shareholder returns would have been very healthy. Sadly, the end result was not just the total depletion of fish stocks, but the loss of 40,000 jobs in five different provinces, which ended up requiring several billion dollars in relief packages.

Having fished out their own waters, the Chinese now have around 2600 vessels that trawl distant waters. As they fish in West Africa, these boats are so large that they can catch in one week what the local Sengalese fisherman would have fished in one year. The cost to the West African economy is estimated to be around US$2 billion. As early as 1970, concerns around over-fishing caused the introduction of ‘catch shares’ and has spread to 40 countries. Catch shares mean just that — a quota system which ensures long-term sustainability of fish stocks for people whose livelihood is fishing; for communities where the fishing sector is their main source of jobs and revenue, but more importantly, to prevent the total collapse of fishing stock for future generations. In Iceland, New Zealand and Australia, catch share programmes have now become the default management system for protecting stocks; sadly, this practice didn’t reach Newfoundland in time.

So if globally we are finally facing a massive rethink about fishing stocks, perhaps it is also urgently becoming time to look at other resources we are in danger of destroying forever by the shortterm pillage of natural resources. Many cities around the world face diminishing supplies of drinking water and massively polluted air quality.

Water: the gold of the future?  Cape Town faced shutting off water to four million people in 2018. Another 11 cities are on the brink of running out of water: San Paulo, Bangalore, Beijing, Cairo, Jakarta, Moscow, Istanbul, Mexico City, London, Tokyo and Miami.

Rapid growth in China is estimated to have lifted 400 million people out of extreme poverty yet in 1997, the World Bank published a ‘Clear Water Blue Skies’ report where they estimated the economic implications of China’s growth and the effect on their environment is costing between 3.5 and 8% of GDP via water and air degradation.

An ever-growing human population is putting stresses on our natural resources like never before. The world population in 1940 was around 2.3 billion, in 2017 the population was 7.6 billion, so it isn’t difficult to understand that feeding this ever growing number of humans has become an immense problem.

Farming requires enormous amounts of chemical fertilisers, which leach into underground water bores. Ancient sewerage systems in many of our bigger cities which were never designed to cope with such massive population growth similarly leach all manner of pollutants into waterways.

Tragically, many of the world’s natural waterways now contain water that is undrinkable. Even though water covers 70% of the Earth’s surface, only 3% of that water is actually fresh water and according to UN-endorsed projections, global demand for fresh water will exceed supply by 40% in 2030, thanks to a combination of climate change, human action — or should that be inaction — and population growth.

Some of the world’s rivers are so polluted as to be unrecognisable as rivers.

More than a billion gallons of waste every day pours into the Ganges: 75% of this is raw sewage and domestic waste. The balance comes from the industrial runoff from factories and tanneries, all of which leak extremely toxic substances into the river. And yet this river is still used for irrigation and daily home use.

The Pasig River in Manila is so heavily polluted that it has been declared biologically dead. No life is able to survive in its waters — no fish, no plants, nothing.

The Citarum River in Jakarta is similarly so heavily polluted that dead fish dot the surface. Many fishermen have given up their trade and instead harvest plastic waste from the surface to recycle.

In May 2014, residents of Flint, a small town in Michigan, began complaining about water quality. Eventually, researchers discovered that lead levels in the water were at more than double the amount at which water is considered dangerous. Yet even though the results showed these dangerous levels of lead, the Department of Environmental Quality continued to deny that lead polluted water.

 In September 2015, Dr Mona Hanna-Attisha conducted her own study, which suggested significant increases of lead in the blood of the children living there. The state government attacked her findings and claimed she was causing hysteria.

In February 2018, Trump signed a bill which means coal companies can now dump mining debris in streams, and on 12 March 2018, the Florida state legislature decided that it was okay for companies to dump treated sewage into local aquifers.

Mining madness. Since the 1990s, coal companies have literally blasted the tops off the Appalachian mountaintops in West Virginia, Kentucky, Virginia and Tennessee. These beautiful peaks, which took hundreds of millions of years to form, are blasted into oblivion in a matter of months. Forests are chopped down and burned. The Environmental Protection Agency predicted that by 2012, 20 years of removing and destroying these mountaintops will have degraded more than 1000 miles of streams.

The more recent practice of fracking (injecting fluid into the ground to break rock and access underlying fossil fuels) is causing damage beyond belief.

Scientific research suggests that fracking can actually cause earthquakes when:

• The fluid injection process occurs in proximity to pre existing faults

• Fracking wastewater is disposed of via underground injection.

Fracking is now known to cause various health challenges to people, animals and fish. Water becomes contaminated with radioactive material and potential carcinogens. In Australia, a government report into drilling sites found that half of the gas well heads tested were leaking methane gas.

The practice has been banned or suspended in many places: France, Quebec, Pittsburgh, Buffalo and the Karoo region of South Africa. I’m ashamed to say that New Zealand isn’t one of them. The EU has proposed a moratorium while investigation is carried out. Moratoria are in place in New South Wales and New York State.

The National Toxics Network in Australia has called on state and federal governments to introduce, as a matter of urgency, a moratorium on all drilling and fracking chemicals until they have been examined independently.

It is even doubtful that fracking offers much by way of energy returns. David Hughes, a Canadian geologist, suggests that ‘Unconventional fossil fuels all share a host of cruel and limiting traits; they consume extreme and endless flows of capital, they provide difficult or volatile rates of supply over time and have large environmental impacts in their extraction.’

It apparently takes between three and nine million gallons of water to extract the oil. The bad news is that this water can only be used once; it is then unusable for any other purpose.

The additional fear is that using these quantities of water could deplete aquifers and cause underground wells to go dry.

There is a thought that the solution to polluted rivers is to ‘dilute’ the poisons. The problem with that thought is, what would we end up drinking or bathing in?

We really do have only one planet and we really must start taking care of it.

‘Infinite growth of material consumption in a finite world is an impossibility’

EF Schumacher. British Economist

You can purchase the entire book AND READ ABOUT THE GOOD GUYS – the ones who are saying ‘enough’; the countries who are saying ‘no’ to pollution and destruction of their pristine rivers:

Normally US$23.95, by purchasing directly from here you will pay ONLY US$15.95

Ann Andrews CSP. Author, speaker, profiler and Life Member of NSANZ

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