Environmentalism was once the bailiwick of radical thinkers and street-proven activists ready to chain themselves up to risky places… It still is, but there are those from the business class, like José María Figueres, who have come to realise that given the right spin, going green is actually a good business proposition.
The man is apparently always on the move. After almost two decades of whirlwind tours, gravitas-laden talks, ambitious projects and inconclusive summits, many might associate José María Figueres with crowded conference centres where international officials, ministers, activists and functionaries of various ranks flock to innumerable working groups and side events before flying back home with little more than sundry tchotchke and hope for another next conference. But the former President of Costa Rica would like to be seen as more than just another suit chasing around the conference track.
While speaking with Swiss Style recently, he came across as a person with a healthy combination of vision and action with a nicely rounded sentence to sum up his approach to climate change: “We can’t wait until governments get organised and make decisions.” Instead of blaming politicians or indulging in apocalyptic predictions about our future, he focuses on immediate and large-scale opportunities for business, ones that can reduce carbon emissions and promote sustainable development as well. His conviction is that for companies “being green means green(backs), and environmental focus means good earnings”. The idea is not exactly new, but Figueres is an accomplished political animal as well and has developed the art of spinning the message to make it palatable to a social stratum whose earnings generally derive from rapid resource depletion, be it natural or human. Conveniently, he is not only Managing Partner of IJ Partners – which seeks to manage the assets of HNWIs and UHNWIs – but he is also Chairman of the international NGO the Carbon War Room, which is headed by non other than Richard Branson, whose business model of eco-friendly airplanes combined with low-cost flying are reminiscent of what light cigarettes did to smoking.
Figueres mastered the art of decisiveness and rhetorical conviction early on. “A combination of family upbringing and education opportunities is what makes me extremely mission-oriented,” he readily admits. Born in 1954 in San José, Costa Rica, he grew up in a family devoted to public service, in which “it is always one’s responsibility to give the best of oneself”. His mother, Karen Olsen, was a progressive social worker, congresswoman, and ambassador to Israel for a while. His father, José Figueres Ferrer, three times president of the country, is considered by many the father of modern Costa Rica for having abolished the country’s army and granted women and blacks the right to vote, after leading a revolution to restore democracy in 1948.
José María spent his childhood in a farm community founded by his father. Years later, to the surprise of his parents, he applied for admission to, and was accepted by, West Point, the US Military Academy. He graduated in 1979 with a major in engineering and returned to his country to work in the private sector. “West Point was a very competitive environment in every sense of the word,” he recalls. “It instilled in me a spirit of perseverance and the importance of teamwork in whatever environment one is in.” Personal discipline was also important but definitely not the only quality Figueres took home from the Academy. Admittedly, he learned how to “lead and take decisions after considering all the relevant information at hand”.
Such an approach to leadership and decision-making has certainly served him well: “I like to size up opportunities, aggregate the resources at hand, focus on clear objectives and get the job done,” he proclaims.
Figueres was no man to see the presidency as the accomplishment of a lifetime. He did work hard to make an impact and transform the country. As a man with military training, he found himself in the odd position of leading a country that had no armed forces. But the world was changing, with armies of businessmen and -women emerging to create another kind of war, just as asymmetrical as those that had gradually liberated the world of the colonial virus. “In a globalised economy,” he explains, “countries, much like companies, need clear strategies to position themselves and render themselves much more competitive”.
Inspired by his close collaboration at Harvard with management guru Michael Porter, and leading economist Jeffrey Sachs, he was convinced that countries must “gain comparative advantages that enable them to extract value from the process of globalisation”. Accordingly, he shifted the paradigm of development in Costa Rica towards what we call sustainable development. The strategy was “an articulate integration of sound macroeconomic policies, investment in social programmes focusing on health and education, and building an alliance with nature,” he comments, stressing the last point.
Costa Rica soon complied with the UN’s Agenda 21 for Sustainable Development and the international conventions on biodiversity and climate change. In 1995 – well ahead of what everyone is talking about these days – his government enacted a tax on carbon emissions. “It paid off handsomely,” he adds. “Direct foreign investment was up to 7.5% of GDP at the end of my term and economic growth amounted to 8.5% per annum, almost double the regional averages of the time.”
In the process of redesigning his country’s economy along green lines, however, Figueres, it seems moved somewhat too close to the private sector. A substantial “consulting fee” from Alcatel that came too close to being entirely clean not only blemished his record in Costa Rica, but also resulted in his being let go from a high-level post with the World Economic Forum, which does not allow its wheels to move vehicles on other tracks. But such is the destiny of a man who moves quickly and at so many different levels. A lesser man might have stumbled, but Figueres, true to his sense of discipline kept his eye on the green line and soldiered on. After all, if a plane stops in flight, it will fall.
In the meantime, Figueres made a new home for himself in Geneva and, world citizen that he is, has not looked back. “It is a superb place to be based,” he points out effusively, “the place is a melting pot of ideas and people, for leadership both in public policy and the private sector”, Figueres’s enthusiasm though goes beyond just the local social qualities. His business acumen always guides his judgment as well: geographically, Geneva is a genuine crossroads and is thus “a terrific launching pad for innovative approaches to business and policy at the global level”. Furthermore, he feels, the city, like the canton and country as a whole operates on the basis of trust. “This,” he argues, “lowers the transaction costs of society and renders Switzerland a much more pleasant, efficient, and competitive place to work in”.
But of all the opportunities available in the city, Figueres chose IJ Partners, whose offices overlook Lac Leman, because of the firm’s commitment to a different model of investment and private wealth management. “We allocate capital to production, and not to financial engineering. We are completely transparent in our fee structure, and we co-invest alongside our clients.” With Figueres on board, the company is now looking much closer at opportunities in the clean tech space. That ties in nicely with his other responsibility, as Chairman of the Carbon War Room.
Back in 2008 Richard Branson, Figueres and a small group of fellow entrepreneurs established the Carbon War Room. The name, of course, has PR pizzazz, recalling perspiring generals moving ships, tanks and tin soldiers about maps an acre in size and telegrams coming in from the front. And that is the impression it is supposed to give. “Richard based the concept on the Churchillian notion that you need to organise a war room in order to win a war,” says Figueres, surely remembering his studies at West Point. The Carbon War Room has identified 25 battles across seven theatres of operation where emission reductions of at least one gigatonne can be achieved.
Its mission is clear – and so are their methods: “We identify sectors of the world economy where through addressing market failures or reinventing business models, we can achieve gigatonne level reduction of carbon emissions,” he explains. According to Figueres, the business angle of the Carbon War Room is the key to success. “I am a tree-hugger. However, I’m also absolutely convinced that we must create good business opportunities out of preserving the environment and reducing carbon. Only then will we attract the leadership, entrepreneurial skills, talent, and capital that this important task requires.”
Only a few governments will lead with policy as he did in Costa Rica, Figueres argues. The urgency to act requires “companies to lead – governments will then follow,” and provides examples to make his point. He cites the case of European telecommunication companies at the dawn of the mobile phone era that “got together, agreed on the GSM standard and began to produce according to that standard, with governments following and setting up regulatory frameworks”. What’s good for business, is then supposed to be good for everyone, though here serious environmentalists would beg to differ. Even in field of environmental protection, “back in 1985,” he explains, “the main problem was the ozone hole caused by the use of CFCs. It was the private sector with Dupont in the lead that stepped in and decided to substitute the use of CFCs, thus effectively dealing with the problem in only ten years. That is the way forward.” DuPont, of course, spent a solid five years lobbying against any pending regulations of CFCs, before turning its coat inside out, and marketing an alternative, thus making a killing in the market and seriously irritating its anti-regulation allies.
Figueres prefers to avoid all the theories and discussions about the past, however. “There are ways of addressing current environmental challenges from a business perspective and doing so efficiently. This can be done with today’s technology,” he points out, citing the cases of corporate green leaders such as Walmart, Siemens, Abengoa and Suntech.
However, he does not stop with examples of what others are doing. For its part, the Carbon War Room is directly involved in an ambitious attempt to profitably reduce shipping emissions by working directly with the industry. “There are about 100,000 ships on our oceans. If they were a country, they would be the sixth largest carbon emitter in the world,” he says. “If we take the 15,000 bigger-class ships, put them into a dry-dock and equip them with technologies we already have, we could roll them out six to eight weeks later consuming between 20 and 30% less energy, hence drastically reduced carbon emissions. In the process, we would have created thousands of jobs in today’s economy, and allocated capital to help finance the shift to the low carbon economy with very profitable rates of return.”
Other battles the Carbon War Room has singled out regard the use of biofuels in the aviation industry, and the retrofitting of buildings to make them resource efficient. Again he says, “Think of the thousands of jobs we could create by retrofitting buildings to make them energy efficient, reducing both their operating costs and their carbon emissions and thereby increasing their market value”.
Forerunner of a new era
Figueres likes to think big. “Two hundred years ago we initiated the Industrial Revolution. It produced enormous opportunities for both economic activity and development.” Today, he argues, the transition to a low-carbon economy can create even greater and better opportunities to reinvent our lives, our workplace, the way in which we transport ourselves and interact in our society. This will re-energise the global economy and set us on to a new path of opportunities. He then adds confidently: “That’s exactly where I feel the world needs to go.”
An out-of-the-ordinary life
José María Figueres Olsen was born on 24 December 1954 in San José, Costa Rica, son of the three-time President José Figueres Ferrer and the American-born Karen Olsen Beck.
He grew up in a farming community and, upon graduating from high school, he was accepted at the United States Military Academy of Westpoint, where he graduated in 1979 with a degree in engineering.
Back in Costa Rica, he led the restructuring of the highly indebted family business
before being appointed as head of the National Railway System in 1986, another institution suffering from perennial deficit. He rose rapidly in public service: Figueres was Minister of Foreign Trade shortly afterwards and Minister of Agriculture in 1988. In the early 1990s, after obtaining a Masters in Public Administration from the Harvard Kennedy School of Government, Figueres fought a highly contested nomination for the presidency, which he won in 1993. In February of 1994, at the young age of 39, José María Figueres was elected President of Costa Rica. Upon leaving government in 1998, he became involved in a number of initiatives with academic institutions, social organizations, private sector partners and the United Nations. He became Managing Director of the World Economic Forum in 2000, but he had to leave the post four years later. He is currently Managing Partner of the Geneva-based investment and wealth management firm IJ Partner SA and sits on the Executive Board of the Carbon War Room. Among his many appointments, he is a member of the UN Secretary General’s Advisory Group on Energy and Climate Change.
When Rachel Carson wrote Silent Spring in the 1960s, she was branded by conservatives as an agent of the then-USSR, an anarchist, a witch, in short anything that could spook little children. Today, however, even large and conservative companies – and the political class it caters too – likes to put on some green clothing occasionally, especially if it improves the bottom line. Here, a small list.
Walmart: In October 2005, the world’s largest retailer announced an ambitious plan that includes a USD 500 million investment to increase the fuel efficiency of its truck fleet by 25 percent, a 20 percent reduction in greenhouse gas emissions by 2012 and other drastic cuts to energy use and solid waste in shops.
Siemens: Europe’s largest engineering conglomerate has resolutely moved towards sustainability employing its know-how to develop technology and equipment for solar and other renewable energies as well as many “green building” technologies components.
Abengoa: This Sevilla-based company has become one of the world’s leaders in sustainable industrial waste management and a number of renewable energy technologies, including the concentrated solar power (CSP).
Suntech: The Chinese holding is the world’s largest producer of crystalline silicon photovoltaic modules; in 2009, it produced 1 GW of emission-free electricity. Founded in 2001 by a consortium of private equity firms, it is believed to have been the most profitable private equity investment ever made in China.
The green efforts are commendable, but they must be taken with a helping of salt, since often the issue of sustainability goes beyond just changing the sparkplugs in a company’s fleet more often. The problem is larger and broadly associated with other, more fundamental practices. walmartwatch.com, for instance, states: “Wal-Mart’s massive size and its voracious need for growth mean that the company’s current green efforts are to the health of the planet what cleaning one store is to its global maintenance operations.” By the same token, the responsibility for environmental sustainability must also be carried by consumers as well in their daily decisions. Just to note a few: The unconscionable use of SUVs, for example, or the chronic need for “choice,” which ends up filling supermarket shelves with wares that have to be thrown out. These are subjects that demand exploration by the media as well.
Michael Eugene Porter is Professor at Harvard Business School and author of 18 books on strategy and competitiveness. His work on competitive advantage and his “five forces” model made him the leading authority in the field and the most cited author in business and economics.
Jeffrey David Sachs, currently at Columbia University, at the age of 29 became one of the youngest professors in the history of Harvard University. A trained macroeconomist, he has been the master behind the “shock therapies” in former communist economies. He currently works on economic development, poverty alleviation and climate change.
Article by Andrea Bonzanni