Transformation involves a lot of uncertainties. It is difficult to project how quickly the marginal costs of new technologies will fall, how much governments will change their subsidy policy or how many customers innovations will find in the future. There is no doubt the transformation will occur, and there are already a couple of pillars of this: Green energy and sustainable products will initially be monopoly factors and result in advantages. However, they will then penetrate the global mass market – and previous solutions will disappear.
There is a good reason why US business professor Rita McGrath advises companies to set an end date when they develop business models and products in order to establish an internal culture of constant change. She says we must “slaughter” our cash cows at their high point and invest the money in new products, services and business models.
The law of the few and the stickiness factor: Why the climate transformation is suddenly taking hold
There are many reasons why the climate transformation is taking place with such vehemence now. In his best-seller “The Tipping Point”, US author Malcolm Gladwell describes three factors that must occur in order for something to have a broader impact.
- The “law of the few” describes the need for people with a high level of social charisma to be part of the debate. One of the most prominent examples is Swedish student Greta Thunberg.
- The “stickiness factor” requires information to be simple and memorable in order for it to remain in people’s minds. More than ever, the complex scenarios of climate researchers are be translated into easy-to-understand models: everyone is now familiar with the 2-degree goal.
- Gladwell uses the “power of context” to refer to the need adapt key messages to the circumstances and experiences of the listener. This is growing now because more and more people are experiencing how theoretical debates are transforming into perceptible weather changes and disasters near them.
Davos was a turning point for the economy, society and the financial world
One turning point in the debate was the World Economic Forum in Davos in 2020. Unlike before, the challenges of the climate crisis were recognized as challenges for the economy, society and financial institutions. It could no longer be ignored that in 2019 more Fortune 500 companies published climate commitments than had done so from 2005 to 2015 combined. From mid-2019, the number of Google searches on the topic rose exponentially as well, and global climate demonstrations have been among the largest protests in history. Something new was also happening in relation to money – the only decisive source of change, according to cynics: The number of sustainable funds exploded and some of the largest institutions announced that in the future they no longer wanted to invest without a strict view of sustainability figures.