Dan Reviews CEO2: The Green Business Game

Can you successfully run a company while reducing CO₂ emissions? Choose Your Industry! And then it begins: your big chance to get in the corporate sustainability game.

What for? To see if it really is possible to run a green company profitably. To impress stakeholders, environmentalists, researchers and customers all at once. To increase profit enough to keep the fat cats fat while reducing carbon emissions by as close to 100 percent as possible within 20 years. All while maintaining positive image for customers and keeping up with the latest technological trends and innovations.

That is the premise behind CEO₂ : The Climate Business Game. The simple but well-researched and expertly designed industry game born of a collaboration between the World Wildlife Federation (WWF) and financial services provider Allianz.

How it Works:

• Players (no need to sign in, register or give any personal info) must first choose an industry: Insurance, Auto, Chemical or Utility.
• Then, a CEO name and company name are chosen.

This is how play begins… so play I did.

My Experience Playing CEO₂

My first choices were in the utility industry. I named my companies Waldo-Emerson (eco-lit cheese, I know) and GreenWires, Inc.

The CEO₂ interface is simple to navigate. You, the CEO, sit in your picturesque office (in my case, it’s wind turbines and coal plant towers lining my penthouse view–which do I choose?). On the left of my unrealistically clean desk is a stack of folders. These are my options — the list of business decisions from which I will cull the future direction of GreenWires. I have two rounds (10 years each through 2030) to make my company profitable enough to keep my job, but sustainable enough to please environmentalists and do my part to curb climate change.

As a utility, in Round One I choose to build offshore wind farms, switch to smart metering, expand electricity storage in order to make room for temperamental renewable energy sources, and develop energy-saving services to expand business operations in an eco-friendly direction (while hopefully creating another avenue for revenue).

At this point, the vast majority of my budget is spent. Decisions are made, so it’s time to see how they fare over my first decade of CEO-ing….

Not-So-Green Results?

Well, my inexperience and the complexity of the utility industry showed through. Stock prices fell by $6 and CO₂ emissions by 27 percent. Not bad on emissions reductions, right? Close, but no smokeless cigar. My environmental critic demands more. My investor is threatening to have me ousted. On the plus side, researchers and customers are happy with my eco-friendly approach to business. So I’ve got that going for me. Although, what good is moral support in a climate-changing capitalist world?

There’s an obvious need to strike a balance here. A sole focus on renewable energy and grid upgrades — ignorant of existing power stations — is not the best outlook, at least in the short term. So in Round Two, I took a slightly different approach. The first thing I did was improve efficiency at all existing power plants. That should help reduce emissions without over-stretching company limits. However, having already invested heavily in wind power and electricity storage, I figured it was too late to back-peddle. And besides, this is the future I believe in.

So along came more investments in offshore wind farms, the “super-smart” grid and auto electrification. It turns out these decisions were not bad for business. By 2030, my stock price had increased $40 — impressing those stern stakeholders — and I’d managed to reduce emissions by 47 percent over the full 20-year span. Unfortunately, my goal was to reduce emissions by 100 percent or as close as possible, because, according to environmentalists, this is the sort of radical change we need to avoid the worst effects of climate change. I made it less than halfway there, despite all my green investments. Thumbs down on the eco-front.

Now here is the point of CEO₂ : to help laymen like me understand the challenges and complexities facing major industries in the fight to reduce carbon emissions over the relatively short term, while surviving in a highly competitive, global and increasingly volatile market. I’d made all the green decisions, focusing extensively on renewable energy production, but still couldn’t meet the reduction targets experts say are necessary (although my 47-percent reduction would almost certainly satisfy government mandates, especially here in the U.S., where we don’t even have any yet).

In the end, I played CEO in the other three industries as well (Auto, Insurance and Chemical), each with their own unique set of challenges and options, as well as unknown risks, changing government regulation and market changes. The utility sector was the most difficult in which to reduce emissions significantly while maximizing profit (in a later try, I managed 63-percent reductions while returning an only slightly smaller profit margin, primarily through carbon capture investment and balancing wind with solar power plants).

The Takeaway for Green Business Advocates

Of course, CEO₂ is over-simplified and it’s not going to make a successful CEO out of all of us (but if only Tony Hayward had played three years ago!). It does, however, offer a unique glimpse into the challenges facing global industry, with adamant, nigh-insatiable stakeholders and environmentalists pulling and pushing on all sides. Caught in the middle will be your customers and the people — most likely in the developing world — to be first and most drastically affected by climate change-related catastrophes.

What’s most interesting is that most of us playing the game are not actually CEOs, but the direct customers of corporations in these industries. We get a glimpse of the larger game, and hopefully some ideas of how and where to put our dollars to good use in the coming decades. To make leaders of green-minded CEOs. To help make them successful so that our planet can be successful.

Such, I believe, is the goal of CEO₂ : The Climate Business Game, and in relaying that message informatively, aesthetically and palatably, the game itself succeeds as well.

Think you can do better? Go play and let us know your results in the comments below (along with your Company Name, Industry and any of your own takeaways)!

Posted on August 19th in Going Solar by Dan.