Because China faces both high pollution and population growth, it has “concertinaed” the whole issue of environmental action into a shorter time frame, Gilding told a Fonterra Shareholders Council seminar.
“China is the bellwether of this issue. We see strong action by government, we see acute pollution in resources, much worse than we face here, and we see the market being an avenue for change,” says Gilding. “If we look at China, which we think of as being a dirty country… we are now seeing incredible growth in green industry [there].” For instance, he said, it had beaten Germany to become the world’s biggest player in solar energy.
Gilding, who advises business globally on environmental issues, was invited to speak at Shareholders Council “Grow Your Mind” seminars around the country.
Gilding, an ex-boss of Greenpeace, told Rural News that he understood some would find it surprising he would be invited to speak at dairy farmer forums, but it showed that Fonterra wanted to hear outside views. He has spent 20 years advising businesses globally on the environmental issues, but had seen a “big shift” by major corporations in the last three to four years.
Gilding said the New Zealand dairy industry is “defensive” on environmental issues as it saw itself as being attacked, but New Zealand farmers should get on board because it would be good for business. The market pressure for sustainability is now “unstoppable”.
“My argument is, it is good for you – you have natural advantages in sustainability as an industry which means the stronger the market demand, the better off you will be,” he said. “Being pasture fed as the base of the industry is a plus. You’ve also got the co-op structure, a really under-utilised advantage. The world is deeply cynical about corporate generally.” Another advantage was simply being from New Zealand. “You have to build and protect that reputation.”
Gilding told the seminar that economists predict the world economy will quadruple by 2050 but he says resources are constrained today and will be four times as constrained by that time. He argued that if we did not change the way we do things, that growth will not be achieved.
He said he wasn’t talking about a crisis in human civilisation: “This is not a doom and gloom story – this story is just that we have to change.” And he supported the market economy as a good way of human beings driving themselves forward and innovating.
“But we have come to the end of a period – an extraordinary and positive period in human history – when we have had this incredible growth not just in population but in per capita wealth. Our economy wasn’t restricted by the availability or resources – in fact they got cheaper and cheaper; until about 10 years ago there was an average 1.5% annual decrease in commodity prices across the world over 100 years.
“That party is over – we have come to a point where we’re not suddenly going to run out of resources but the resources are no longer freely available and not getting cheaper.”
Gilding said everyone who has looked at the issue comes to the same conclusion including economists, business people, the US military, Standards and Poor and big corporations such as Unilever, DuPont, Walmart and General Electric.
“We have to change the way we do things. In that change we win or lose – if we are ready for it we will win, and if we aren’t ready for it we won’t.
“This is an economic view, this is a business view about constraints … this is not about polar bears or fluffy animals – this is about resources that feed the economy.”
Big businesses such as Unilever, DuPont and Walmart are now managing this issue as a core business problem, driving it back through the supply chain. They see that governments have agreed action is needed on emissions – and want to get ahead of the game.
“If we don’t change the way we do things, we won’t grow. It is no longer if we grow too fast we will damage the environment – it is now an economic issue if we don’t change what we do, we simply won’t grow,” Gilding said.
While a fan of technology, he does not think it can develop fast enough to allow for, for instance, growth to quadruple by 2050 within the resource constraints we have. We have to find out how to grow within those resource constraints.
Gilding said all the biggest science bodies and every government globally agreed the world is facing climate change. The arctic ice was melting at a rate 80 years earlier than predicted.
“It doesn’t mean they are all right … but it would be an incredible bet to say they are all wrong.”
