Sustainability makes good business sense

Today’s world presents challenges and opportunities. The population is growing — there will be almost 8.5 billion people by 2030. The middle class is rising — more than one billion consumers will join the middle class in the emerging markets in the next few years. And by the end of this century, the global urban population will almost double.

In this environment, many people face real, substantive challenges: Energy constraints and a shortage of natural resources such as water; lack of adequate infrastructure to transport goods and little or no access to critical services such as health care.

The future growth of businesses will be dependent on its ability to help society address these needs and grow economies across the world. At GE, we have found that building efficiency into business strategy and operations improves productivity and saves money while also enhancing environmental performance. We call it ecomagination. Ecomagination is the way we work. It is GE’s commitment to develop technologies to help our customers be more efficient and productive. It is a business strategy, designed for our customers, that is driving demand. Ecomagination has generated approximately $130 billion (Dh478.14 billion) in revenue since its launch in 2005 and in 2012, we generated approximately $25 billion in revenues — equivalent to a Fortune 100 company. In other words, innovation in energy and sustainability translates into good business sense.

It is important to address the myth that companies that seek to be profitable cannot be sustainable. And this can be accomplished only through discussions that bring together all industry stakeholders. That is what makes the Abu Dhabi Sustainability Week a very relevant forum, not just for the Middle East but for the world. It addresses the critical need to not just create awareness about the potential impact of dwindling reserves and growing energy demand, but to underline the sound business proposition of a sustainability strategy for businesses.

Today, in the Middle East, we see a significant shift in the way energy sustainability is viewed. This is only logical because the narrative of the region, built on the platform of the energy sector, is being rewritten. Rising population, massive infrastructure development and operational inefficiency are tearing at the long-term prospects of energy availability.

The energy industry is coming to realise that the future of energy is not about one source of energy vs another. It is about the balance of an energy mix that drives productivity. That is where the debate of sustainability becomes interlinked with that of the need to drive energy efficiency. While the first focuses on renewables, the second places greater emphasis on getting everything we can out of every molecule of gas or oil we use.

The world needs more production from existing wells, more efficient new turbines to convert gas into electricity, more innovative upgrades to the installed base, lower losses in distribution and more efficient lighting, cooling and heating. As energy drives infrastructure growth and infrastructure creates new jobs, this productivity driver will never go out of style in any part of the world.

Further expediting the energy shift is the sheer volume and increased access to shale gas globally. According to the International Energy Agency, with shale leading the way, unconventional gas accounts for close to half of the increase in global gas production between 2011 and 2035. Shale gas can be one of the biggest productivity drivers of our lifetime, fuelling a manufacturing renaissance that can redefine and grow the energy marketplace today. But the question is how unconventional and traditional energy sector leaders can work together to create a new and dynamic global growth narrative?

The companies and countries that will win in this new climate of change are those that can get in front of the trends, move quickly, innovate and work together to offer solutions and deliver results.

This is where Abu Dhabi’s foresight comes in. Through programmes like Masdar City and new energy-efficiency building codes, Abu Dhabi is setting the pace on end-use efficiency.

Five years ago, GE and Mubadala announced a global partnership, encompassing a broad range of initiatives, including everything from commercial finance to clean energy research and development to aviation and even talent development. From investing in an ecomagination centre in Masdar, building infrastructure for Abu Dhabi’s health care system and establishing the Abu Dhabi Leadership Acceleration for Business, we have made remarkable progress. But most significantly, our progress has been built on a culture of productivity and efficiency. Less than a decade ago, that culture would have been an afterthought in discussions in the Middle East. Today, it drives business.

As the Abu Dhabi Sustainability Week kicks off, it is fitting to note that any company’s ability to grow will depend on its resolve to drive efficiency within its walls and in turn help grow and sustain economies while reducing environmental impact globally. Sustainable growth is not an option anymore. It is a sound, logical, financially sensible and necessary way forward.

Nabil Habayeb is GE’s president & chief executive officer for the Middle East, North Africa and Turkey.