This article is based on the keynote speech which Peter Boyd delivered at the LBMA/LPPM Global Precious Metals Conference on 18 October, 2022.
I am a “stubborn optimist”, a phrase that I’ve borrowed from Christiana Figueres, who ushered through the Paris Agreement as the then Secretary of the UNFCCC – an inspirational force of nature with a clear view of the hill we have to climb, but knows the difficulty of the ascent, and who’s still optimistic about doing it.
I’d like to give everyone a firmer grasp of the simplicity of the problem, and the range of solutions, so that they can be inspired to act and lead. In essence, I want the leaders of this industry to become more concerned but also more optimistic.
Rockström et al have documented the idea of the ‘great acceleration’. We, as humans, are impacting the world through socio-economic trends such as increases in population, real GDP, urban population, water use, paper production, transportation; and the Earth is responding to these with increased levels of carbon dioxide, nitrous oxide, methane, stratospheric ozone, surface temperature, ocean acidification and coastal nitrogen (to name a few).
If we go back to just 10,000 years ago, the Earth’s temperature started to stabilise – during a period called the Holocene – which allowed humans to invent farming, in more than one place, and to settle down.
I’d like to give everyone a firmer grasp of the simplicity of the problem, and the range of solutions, so that they can be inspired to act and lead.
Shift to Human-Dominated Epoch
In more recent years, we’ve become a very big force on the world. Rockström and the Stockholm Institute have gathered information from hundreds of scientists and developed this concept called the planetary boundaries [a set of nine planetary boundaries within which humanity can continue to develop and thrive for generations to come]. As you can see from the graphic below, we’re nudging at the edges of really a safe space of humanity, such that the scientists actually gathered recently and stated that we are now entering a new human age called the Anthropocene, where humans are the dominant force on nature. They dated the start of this age as the first nuclear test.
Another crucial concept is that of Anthropogenic Mass. The mass on Earth created by humans has, for the first time, exceeded the weight of all global-living biomass. The full animal kingdom has been estimated to weigh four gigatonnes, and humans have now created eight gigatonnes of plastic.
Your Going Concern
Let’s just say, for the sake of argument, that the average length of each business in the audience is 46 years. The planet is 4.6 billion years old. So, say, in your 46-year business, you took on a new employee four hours ago – an entrant called The Human.
One minute ago, the new employee had an interesting idea called the Industrial Revolution, and in that last minute, they destroyed 50% of the world’s forests, and in the last 20 seconds, they destroyed 68% of the world’s biodiversity. This is what they’ve done to your going concern. What would you do with this new employee if this was your business? As a headline in the Onion puts it: “Pressure Mounting For Humans To Step Down As Head Of Failing Global Ecosystem”.
Source: Steffen et al. Johan Rockström et al. Stockholm Resilience Centre.
In terms of solutions, there are many that will make money and cost money, but they ultimately balance out with an immense opportunity cost of not doing these things. So the world can afford to do it – it’s just that the risks and rewards aren’t always in the right place.
So, if that’s the big picture, where’s the solution space? A very powerful concept embedded in COP20 in Lima, going into the Paris Agreement and beyond, is this concept of Net Zero. But this concept doesn’t have to be just scientifically robust. Who goes to a campsite and wants to leave the campsite worse than they found it? I believe that’s the ethos behind Net Zero. It’s simply to leave this campsite as beautiful as you found it – in balance. It is enshrined in Article 4 of the Paris Agreement: achieving the balance between human-caused gases, emissions, anthropogenic emissions, and the ability of the natural world to absorb those emissions.
But the speed and trajectory matters – so agrees an IPCC press release from April 2022, which said: “The evidence is clear: the time for action is now. We can halve emissions by 2030.”
I was excited to hear about the signing of the Responsibility and Sustainability Principles Declaration announced at this Conference, which commits to, among other things, working to reduce the gold industry’s greenhouse gas emissions in line with the goals of the Paris Agreement. This implies Net Zero by mid-century; and halving emissions by 2030.
The key idea here is from the New Climate Economy Report from 2014, which said that “the cost of doing what we need to do is not all cost”. There are solutions that will make money and many that are expensive, but they ultimately balance out with an immense opportunity cost of not doing these things. The world can afford to do it – it’s just that the risks and rewards aren’t always in the right place.
If you think about the clean energy curve, it’s smooth and largely – supply chain notwithstanding – predictable. The idea of clean energy is a technology, not a fuel. We’re writing down the cost curve.
Meanwhile, fossil fuels are getting harder, more expensive and dirtier to get out of the ground over time. Looking at this simple chart (on the left), you can see a squiggly upward curve and a smooth downward curve. At the left side of the crossover, dirty (red) is cheaper than clean (green). It gets interesting at the crossover, and then on the right-hand side of the crossover, clean is cheaper than dirty, and then the transition accelerates at scale.
We moved out of the Stone Age not because we ran out of stones, but because something else was better. We need to move into the cleaner economy, because it’s cheaper and because it’s better. Not because we’ve just decided.
Take electric vehicles. The share of electric vehicles per manufacturer has increased hugely since 2009. By mid-century, the idea is that economics will favour switching across to electric vehicles without subsidy.
Who needs to change? All sectors are necessary, and none alone is sufficient.
Connected Leadership: Purpose to Priorities
My work is at the intersection of Connected Leadership and the ‘Great Work’. I’m excited about the idea of Connected Leadership – how we bring our sense of purpose to clear priorities, visualise our future potential, and plan appropriately to ensure progress towards our goals. I teach this in Yale, and coach leaders across sectors outside the university.
[image: Peyer Boyd (right) during a panel session at Conference, next to Paul Fisher (LBMA Chairman)]
The ‘Great Work’, the transition we have to undertake, is described in a book of the same name by Thomas Berry which details how to create this sustainable world in which we’re a benign force on ourselves and the planet itself – and how to get the best out of everyone while doing it.
As part of this, I serve on the Expert Peer Review Group of the UN’s Race to Zero campaign. I see accelerating the just transition to sustainability of non-state actors as crucial to this next decade. We need to navigate with both ambition and clarity, because being ambitious and clear inspires the right action. Only ambition carries the risk of greenwashing, while only clarity risks not going far or fast enough.A related area that I hope this industry also helps with is preserving our forests. Some 6% of the earth’s land surface is tropical rainforest, representing over 50% of our embedded carbon. 5% of the world’s population are indigenous people – who I was pleased to hear mentioned in the Responsibility and Sustainability Principles Declaration – but they’re looking after 80% of those forests.
What we need to save and who we need to rely on to save it is critical. We need to change the economics on the ground so that trees are worth more alive than dead, and sovereign-issued carbon credits aligned to the Paris Agreement are a key step in making this a reality.
Back to this industry, how can we look across the precious metals value chain and identify the key opportunities to become sustainable? And who do we need to engage?
As an outsider looking in, I can see the need to understand and disclose, and start working and doing, while becoming part of the new, clean economy. Different parts of the industry coming together is crucial here.
Looking through my Race to Zero lens with its ‘five p’ criteria, I would encourage ‘pledge’ (which you clearly have), ‘publish’ (which you’ve done today), and then follow through with ‘plan’ and ‘proceed’ to get things done, and be cautious and consistent with ‘persuade’ (who you work with and what they and you advocate for). The UN Race To Zero has launched clear criteria and a guide to help on these 5 Ps - https://racetozero.unfccc.int/system/criteria/ . I’d also recommend you anchor your sustainability goals to your purpose; connect your sustainability ambition with the ultimate mission of what you’re trying to achieve for your shareholders and your long-term vision. This will provide the strength and commitment when courage is required.
Our live polls during the Conference showed that on the spectrum concern about sustainability, the audience was tilting towards ‘concerned’. Not too many were ‘alarmed’ and only a few were ‘dismissive’:
And now onto optimism: can we, as a world, become sustainable? Poll responses sit around the middle of the scale. And regarding how optimistic the audience was an industry as to whether we can solve this problem, the poll shows slightly greater optimism.
Peter Boyd is a Lecturer at the Yale School of the Environment and Resident Fellow at the Yale Center for Business and the Environment.
Outside Yale, he is Founder & CEO of Time4Good, helping Leaders and their teams in a variety of sectors, build purpose-driven paths to maximum positive impact. He is on the Expert Peer Review Group of the UN’s Race To Zero campaign and the Distinguished Advisory Group of the Integrity Council for Voluntary Carbon Markets. He also serves as an advisor to the Coalition for Rainforest Nations and REDD+ - a digital platform to bring UN-registered, nationallyissued REDD+ forest carbon credits to a wider world of purchasers.
His private-sector experience started with McKinsey & Co then spanned over ten jobs in twelve years at the Virgin Group, including CEO of Virgin Mobile South Africa. In non-profit and government, he was Launch Director and COO of Sir Richard Branson’s Carbon War Room; served as Chair of The Energy Efficiency Deployment Office for the UK Department of Energy & Climate Change; and led The B Team’s ‘Net-Zero by 2050’ initiative focused on business encouragement for an ambitious Paris Agreement at COP21.
Peter is originally from Edinburgh, Scotland; graduated from the University of Oxford with a degree in Philosophy, Politics and Economics; and now lives in Westport, Connecticut.